Mighty Craft Limited

Developing 
our future
Annual Report & Accounts 
2022 

Introduction
Our mission
To provide relevant credit 
solutions, in-person 
or digitally, based on 
understanding people’s 
needs and circumstances. 
Our vision
Simple, flexible credit 
for people who cannot 
typically access 
mainstream services.
Our purpose
To meet the real needs 
of our customers, 
supporting them to a 
better financial life.
Morses Club PLC is an 
established, relationship-driven  
consumer finance provider.
Morses Club PLC.  
Understanding 
customers. 
Understanding money.
Contents
Strategic Report
01	
Operational Highlights
02	
Company Update
03	
At a Glance
04	
Investment Case
06	
Market Overview
08	
Chief Executive Officer’s Review
12	
Business Model
14	
Delivering for our Customers
16	
Delivering for our Employees
18	
Our Strategy
20	
Financial Review
24	
Risk Management
25	
Principal Risks and Uncertainties
29	
Viability Statement
30	
Stakeholder Engagement and s172
34	
Environmental, Social and Governance
Corporate Governance
46	
Board of Directors
48	
Chair’s Introduction to Governance
50	
Corporate Governance Report
58	
Nominations & Succession Committee Report
62	
Audit Committee Report
69	
Risk & Compliance Committee Report
72	
Remuneration Report
77	
Disclosure Committee Report
78	
Directors’ Report
82	
Directors’ Responsibilities
Financial Statements
84	
Independent Auditor’s Report
97	
Consolidated Income Statement
98	
Balance Sheet
99	
Consolidated Statements of Changes in Equity
100	 Cash Flow Statement
101	
Notes to the Consolidated Cash Flow Statements
103	 Notes to the Consolidated Financial Statements
150	 Morses Club PLC Information for Shareholders
Financial Statements
Corporate Governance
Strategic Report
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

2022
2021
2020 A
2020 N
15.5
13.8
6.1
4.6
2022
2021
2020 A
2020 N
9.5
8.4
3.9
4.4
2022
2021
2020 A
2020 N
22.3
19.9
10.3
13.6
2022
2021
2020 A
2020 N
16.6
14.8
8.9
10.1
2022
2021
2020
11.5
0.5
-42.9
2022
2021
2020
7.3
0.2
-25.0
2022
2021
2020
17.2
0.4
-77.0
2022
2021
2020
12.8
0.3
-57.4
Continued to embed a digitally 
focused operating model due to the 
pandemic, using existing technology 
to work remotely, whilst maintaining 
customer contact and collection 
activity
Further developed fully online 
Customer Portal, with over 104,000 
customers (FY21: 107,000)
Reshaped the digital division to 
maximise the core credit offering and 
to take advantage of the wider non-
standard credit market
Delivered further technology and 
process enhancements in our 
HCC business to balance a digital 
service with access to in-person 
customer service to enable a virtually 
paperless documentation process
Further developed our remote 
working model with the input of 
our employees to develop our 
community-based service, whilst 
delivering work/life balance
Continued to develop our 
environmental approaches by 
reducing our property portfolio  
and company car commitments
Performance in the year has been 
heavily impacted by the recognition 
of £42.6m in relation to redress 
claims as evidenced by the graphs 
on this page for; reported loss, basic 
loss, return on equity and return on 
assets. See Page 112
Alternative performance measures
In reporting financial information, the Group presents 
alternative performance measures, ‘APMs’ which are not 
defined or specified under the requirements of IFRS. The 
Group believes that these APMs, which are not considered 
to be a substitute for or superior to IFRS measures, provide 
stakeholders with additional helpful information on the 
performance of the business. The APMs are consistent with 
how the business performance is planned and reported 
within the internal management reporting to the Board. 
Some of these measures are also used for the purpose of 
setting remuneration targets. The definition of Adjusted PBT 
is outlined in the glossary of APMs on page 147. Each of the 
APMs used is set out in the glossary at the back of the financial 
statements on Pages 147 to 149. Reconciliations are also 
provided on Page 148 to the nearest statutory measure. The 
Group makes certain adjustments to the statutory measures 
in order to derive APMs where relevant. The Group’s policy is 
to exclude items that are considered to be significant in both 
nature and/or quantum and where treatment as an adjusted 
item provides stakeholders with additional useful information 
to assess the year-on-year trading performance of the Group.
1	
Definitions and reconciliations to the nearest statutory measure are set out in the 
Glossary of Alternative Performance Measures on Pages 147 to 149.
2	
The reported loss (before tax) is due to the recognition of the complaints liability. 
Further detail on page 2.
ADJUSTED RETURN1 ON EQUITY (%)
13.6%
32.0%
ADJUSTED RETURN1 ON ASSETS (%)
10.1%
13.5%
REPORTED LOSS2 (BEFORE TAX)
-£42.9m
-8,680.0%
BASIC LOSS PER SHARE (P)
-25.0p
-12,600.0%
RETURN ON EQUITY (%)
-77.0%
-19,350.0%
RETURN ON ASSETS (%)
-57.4%
-19,233.3%
ADJUSTED PROFIT1 (BEFORE TAX)
£4.6m
-24.6%
ADJUSTED EARNINGS1 PER SHARE (P)
4.4p
12.8%
Operational Highlights
01
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Company Update 
Material uncertainty regarding the Group as a going concern. Following the end of the 
period, the Group has made a number of announcements and gives the following update.
Redress Claims
In February 2022, the Group announced that 
its profitability in FY22 would be impacted 
by the level of unaffordable lending claims 
received prior to the announcement. This 
followed significant claims management 
company activity, from which a discernible 
trend has emerged on the cases being 
upheld by the Financial Ombudsman Service 
which could be applied retrospectively. 
On 21 June 2022, the Group announced 
a further increase in complaints submitted 
by claims management companies with 
the associated costs of complaint volumes 
likely to adversely impact on the trading 
performance of the first half of FY23. On 
20 July 2022, the Directors confirmed that, 
due to the emerging position relating to 
complaints, a significant complaints liability 
was expected to be recognised in the FY22 
accounts, with £42.6m being recognised as 
an exceptional item. Following the Company 
announcement on 20 July regarding the 
potential Scheme of Arrangement, the Group 
experienced a higher level of unaffordable 
lending claims in the HCC division, which led 
the Group to seek a pause on the processing 
of claims, which was announced as effective 
from 11 August 2022. Without this pause, it 
is the Directors’ belief that the Group could 
have suffered significant near term liquidity 
issues, threatening its going concern status.
The Directors accept there is a liability in relation 
to customer redress claims for unaffordable 
lending against the Company (Redress Claims) 
at the balance sheet date, however there 
is significant uncertainty of the total liability 
which will be paid. This is due to the fact that 
the methodology for assessing the population 
of claims is yet to be agreed, and the level of 
subsequent customers who may claim against 
that methodology not yet being known. 
The rise in complaints volumes prompted 
a review of the root cause of complaints 
received which led to a review of historic 
lending using the date of transfer of consumer 
credit regulation to the Financial Conduct 
Authority (FCA) as a guide timeline. This 
review, which has incorporated third party 
advice, identified a potential gross redress 
owed to customers of £112m, though this is 
yet to be agreed with the FCA and further 
review of this amount will be required. There 
is therefore significant uncertainty regarding 
the exact quantum of the gross redress. 
Of this gross redress it is not known 
what percentage of customers will claim. 
The Directors have taken third party 
advice and reviewed payments made by 
other lenders against complaints claim 
liabilities and have estimated a 40% 
take-up rate. However, there is significant 
uncertainty in respect of this estimate. 
The Directors have applied the take-up rate 
to the gross redress amount, the impacts 
of which are recognised in the Income 
Statement as an exceptional item totalling 
£42.6m. Of this, £3.5m relates to amounts 
which are expected to be set off against 
existing customer balances, and is therefore 
included as write-off against the loan book. 
The remaining £39.1m relates to the net 
present value of the Redress Claims liability 
estimated to be paid to customers. The cost 
of administering payments to customers 
has been excluded from this liability and 
will be incurred in FY23 and beyond. 
Funding 
The Group’s current facility of £35m is in 
place until 31 March 2023, supported by a 
funding consortium of two existing providers. 
Discussions continue with lenders regarding 
the future facility options. We draw attention 
to note 1 in the financial statements, which 
indicates that the Group’s current facility of 
£35m expires on 31 March 2023. Discussions 
continue with lenders regarding the covenants 
within the facility, the extension or deferral of 
the term-out clause which would be enacted by 
the end of September 2022 and would place 
restrictions on the ability of the Group to issue 
new loans and the facility’s possible extension. 
This term-out clause is pre-existing and 
essentially provides assurance to the funders 
of the repayment of the facility within the last 
6 months of the agreed term. In practice, this 
has the effect of converting the rolling credit 
facility to a term loan. This would mean that 
any subsequent collections made on the loan 
book, would be ringfenced to pay down the 
facility, less any operational costs the business 
has. Therefore, it would place restrictions on the 
business with regard to the issue of new loans. 
Discussions with the lenders have already led 
to a temporary deferral of the testing of two 
covenants from August to September 2022, 
to allow time for further discussions. These 
two covenants are linked to profitability and, 
if tested, are likely to fall outside of covenant 
range. There has been no breach, nor waiver 
of covenants up until the date of the report. 
The Board recognises that as the current 
funding facility is in place for less than 
12 months following the date of signing 
the Financial Statements, there is 
material uncertainty in relation to going 
concern regarding secured funding. 
Summary
In the announcement on 20 July 2022 the 
Directors stated that whilst they considered 
that Morses Club had adequate liquidity for 
the immediate future, they believed that 
action would be needed to secure the Group’s 
ongoing future. Following the Company 
announcement on 20 July regarding the 
potential Scheme of Arrangement, the Group 
experienced a higher level of unaffordable 
lending claims in the HCC division, which led 
the Group to seek a pause on the processing 
of claims, which was announced as effective 
from 11 August 2022. Without this pause, it 
is the Directors’ belief that the Group could 
have suffered significant near term liquidity 
issues, threatening its going concern status.
It is the view of the Directors that the Group’s 
trading performance demonstrates a basis 
for the future viability of the Group and the 
business continues to be a going concern. 
However, there remains a material uncertainty 
regarding both the viability of the Group 
and its basis as a going concern, relating 
to Redress Claims and funding. 
In assessing the Group’s going concern 
status the Directors produced a number 
of forecast scenarios, all of which include 
a requirement for funding in line with 
the current agreement with lenders. 
The base case forecast on which the Directors 
have based the going concern assessment 
includes an assumption that the settlement of 
Redress Claims occurs in an orderly manner 
over a period of time and that complaints do 
not remain at recent peak levels. If complaints 
volumes are higher than this level then this will 
accelerate the settlement of the Redress Claims 
liability and will therefore have a detrimental 
impact on liquidity. The timing of the settlement 
of the Redress Claims liability is key to the 
going concern assessment of the Group.
Therefore, the quantum of the redress claims 
liability and timing of settlement, as well as 
the extension or deferral of the term out 
clause and availability of funding beyond 
31 March 2023 create a material uncertainty 
that may cast significant doubt about the 
Group’s and Company’s ability to continue 
as a going concern such that it may be 
unable to realise its assets and discharge its 
liabilities in the normal course of business.
The financial statements have been produced 
on a going concern basis, whilst noting the 
aforementioned material uncertainty.
Potential implementation of a Scheme
As a result of this increase in the level of 
claims, the Board has decided to pursue the 
potential use of a Scheme of Arrangement 
under Part 26 of the Companies Act 2006 (the 
Scheme) for dealing with Redress Claims. A key 
objective of a potential Scheme would be to 
treat all customers equitably and settle eligible 
Redress Claims over a period to be defined. 
The Directors believe that a successful Scheme 
would provide more certainty in respect of the 
total liability for Redress Claims and help to 
secure the long-term viability of the Group.
The Directors believe that the benefit 
of any potential Scheme would help to 
bring certainty to a currently unknown 
liability and assure a more stable go-
forward trading position for the Group. 
The Company has provided the FCA with its 
proposals and is engaging with them regarding 
a potential Scheme and its future business 
model. The Company has also taken steps 
to appoint an independent Chairperson to 
set up a Customer Committee to represent 
eligible customers and assist the Company in 
developing any potential Scheme. Details of 
any potential Scheme would be announced 
in due course. The Scheme would be subject 
to the approval of the requisite majority of 
affected customers (i.e. those customers who 
received loans during the period to be covered 
by any Scheme) and, thereafter, the Court. 
Following the Company announcement on 
20 July regarding the potential Scheme of 
Arrangement, the Group experienced a higher 
level of unaffordable lending claims in the 
HCC division, which led the Group to seek a 
pause on the processing of claims, which was 
announced as effective from 11 August 2022. 
Without this pause, it is the Directors’ belief the 
Group could have suffered significant near term 
liquidity issues, threatening its going concern 
status. Accordingly, it is also the  Directors’ 
belief that this would lead to worse outcomes 
for historic customer owed redress than can 
be achieved through the potential Scheme.
The potential Scheme of Arrangement 
would detail further how we would make 
payment against the estimated £42.6m 
complaints liability and would include 
guidance regarding future profits  
treatment and dividend policy  
(as appropriate).
Financial Statements
Corporate Governance
Strategic Report
02
ANNUAL REPORT & ACCOUNTS 2022 
Morses Club PLC 

97%
HCC CUSTOMER 
SATISFACTION1
(FY21: 98%)
1. Based on annual independent 
satisfaction survey for HCC.
At a Glance
39,000
ONLINE LENDING 
CUSTOMERS  
(FY21: 23,000)
43,000
DIGITAL CUSTOMERS
(FY21: 35,000)
Operating under the Morses Club brand,  
we provide small, short-term loans to 
customers who need affordable credit 
and are often unable to access traditional 
mainstream lending. 
Our model is based on a loan issue and 
collection process via agents that typically  
live in the same communities as our 
customers. During the Covid-19 pandemic, 
we adapted our operating model to work 
remotely using our existing technology 
platform to maintain customer contact and 
collection activity and a new remote lending 
process to deliver cashless lending to new  
and existing customers. 
Customers value the simple, fixed payment 
weekly collections model and the fact that 
no charges are levied for arrangement or 
if payments are missed. Forbearance has 
always been a key part of our approach, and 
we ensure that customers are supported 
through any short-term difficulties. 
The majority of our borrowers are repeat 
customers, and customer satisfaction rates 
are consistently at 97% (FY21: 98%) or above. 
We are the largest UK Home Collected Credit 
lender, and serve customers throughout the 
UK through our network of 1,077 (FY21: 1,385) 
self-employed agents.
The Morses Club brand has a history dating back 
130 years, with the current PLC Group having been 
established in May 2016. 
We have two divisions offering distinct forms of  
non-standard finance: home collected credit and 
digital lending. Together, our two brands provide 
flexible, affordable and convenient access to credit  
for 186,000 (FY21: 180,000) customers in the UK.
143,000
HCC CUSTOMERS  
(FY21: 151,000)
An estimated 10-12m consumers – 20-25% 
of UK adults – have difficulty accessing credit 
from mainstream financial institutions1 on 
account of an impaired or non-existent  
credit history.
Find out more on page 7
Dot Dot offers online instalment 
loans of up to 48 months
Dot Dot has operated as a fully online lending 
provider since its launch in March 2017, 
offering instalment loans to serve the needs of 
two segments of the lending market:
•	
short-term 3-6 and 9-month duration 
loans serving customers who want to 
borrow £100-£1,000
•	
loans of £1,500-£5,000 for customers 
who want to borrow more over a longer 
period of up to 48 months.
Due to significant changes in market 
conditions, the decision was taken to withdraw 
the e-money account service U Account from 
the market. U Account closed on 3 May 2022.
HCC
Digital
We operated under 
two digital brands 
in the period
03
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Investment Case
We are focused on 
continuing to operate in the 
non-standard credit sector.
Established  
market position
Sound risk 
management
•	
143,000 HCC customers across the UK
•	
Strong underlying trading performance,  
with high levels of customer satisfaction  
and repeat business 
•	
#1 Home Collected Credit company in the UK
•	
Prudent credit risk policy: stringent criteria 
applied to every customer, every loan
•	
High levels of operational experience and 
knowledge of the sector
Read more on page 24
Read more on page 5
Financial Statements
Corporate Governance
Strategic Report
04
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Stabilising to  
deliver growth
Strong  
executive team
•	
Scalable infrastructure
•	
Roadmap of organic growth initiatives
•	
Untapped market potential of c.10m people
•	
Gary Marshall appointed as Chief Executive 
on 21 February 2022
•	
An experienced Executive team and 
Board, with relevant sector knowledge and 
complementary capabilities
HCC and Digital divisions 
now developing to maximise 
market opportunity
. 
Read more on page 46
Read more on page 7
The Company has made changes to its credit policy 
and lending approaches in line with customer and 
market demand. This includes the introduction of 
breaks in lending, further assessments of affordability 
before loan issuance, monitoring payment 
performance requirements as well as continuing to 
assess the terms and value of each loan for each 
customer’s circumstances. 
The Company has continued to experience increases 
in claims submitted from claims management 
companies. Subsequently, the Company has 
announced its intention to consider a potential 
Scheme of Arrangement in order to ensure the best 
outcome for customers. The Directors believe that the 
benefit of any potential Scheme would help to bring 
certainty to a currently uncertain liability and assure 
a more stable go-forward trading position for both 
divisions. The Company has provided the FCA with 
its proposals and is engaging with them regarding a 
potential Scheme and its future business model. 
05
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Market Overview
We have the 
capability to support 
growing demand.
Market drivers 
 
The non-standard finance market is 
sizeable and growing
An estimated 10-12m consumers – 20-25% 
of UK adults – struggle to access credit from 
mainstream financial institutions due to an 
impaired or non-existent credit history.
The effects of the pandemic, the rising cost 
of living and the indirect effects of the war 
in Ukraine are also likely to push more prime 
borrowers into the non-standard market, with 
around two million people currently moving 
between standard and non-standard markets 
due to credit scores.
Market trends 
 
The non-standard credit market is 
expected to grow as supply contracts
The last two years have seen dramatic 
changes to the markets in which we operate.  
A large number of lenders of all sizes have 
exited the market for various reasons, leaving 
fewer providers at a time when demand is 
increasing.
The community of small, family-owned  
HCC businesses has further declined, with  
a reduction to 246 providers (FY21: 262)  
from the level of 420 providers serving the 
market during FY19. 
Although unemployment declined during 
the year, large numbers of adults are 
working part-time while looking for full-time 
employment or are on zero-hour contracts. 
Increasing numbers of people are unable to 
work for health-related reasons: the number 
of working age people with a long-term 
health condition rose by 1.2 million since the 
beginning of the Covid-19 pandemic1. 
A proportion of the working age population 
– whether or not in work – are reliant on 
benefits, which have been reduced. Insecure 
work and the resultant low or fluctuating 
income are driving the demand for non-prime 
lending.
Our customer engagement and usage of  
our customer portal illustrate the strong 
appetite for our blend of face-to-face and 
digital service.
This trend of digitalising HCC services has 
remained due to customer demand post 
pandemic. Our scale and reputation within 
the HCC sector and changes to our business 
during the pandemic have put us in a good 
position to address this market. We have 
made changes to our credit and lending 
approaches in response to customer demand 
and market requirements. 
The sector has continued to be impacted 
by complaints from claims management 
companies and we continue to closely 
monitor the situation. Please see page 2 
for more information. 
Financial Statements
Corporate Governance
Strategic Report
06
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

The opportunity  
for Morses Club
Market trends support Morses Club’s 
strategy
We see growing demand for our products  
and services as increases in the cost of  
living bite and are set to continue. At the  
same time, customers have fewer options 
as the number of providers has fallen 
significantly. As the leading regulated  
provider in this space, we feel great 
responsibility to work with the regulator  
to address the issue of growing numbers  
who see no option but to turn to  
unregulated sources of credit. 
We look forward to greater clarity following 
regulatory reviews of the sector, and are  
ready to adapt our business as required.
We can benefit from reduced competition 
within the HCC industry, and from increasing 
demand for digital services.
10m
MARKET POTENTIAL
1.	https://www.theguardian.com/society/2022/mar/05/
covid-pandemic-sparks-steep-rise-in-number-of-
people-in-uk-with-long-term-illness
•	
Demand for high-cost credit is driven by individuals who 
are in low-paid, insecure work. A key driver, therefore, is the 
labour market.
•	
However, despite higher overall employment, increased 
temporary and part-time working is likely to have led to 
higher demand.
•	
There has been significant growth in numbers of adults 
who are working part-time while looking for full-time 
employment, or are on zero-hour contracts. These are 
described in official statistics as ‘underemployed’.
•	
The chart shows that overall household debt has remained 
high relative to household income during the period since 
2018, and that it stopped falling after 2015.
Source: ONS, OBR 
Note: underemployed defined as workers who are employed but wish 
to work more hours. Forecast based on historical relationship with 
unemployment.
Source: ONS / OBR EFO October 2021 
3.75
5.18
4.15
5.485.645.69 5.61
4.90
4.58
4.21
4.01 3.81 3.81
4.43
4.304.25
3.983.953.973.98
2007
2015
2011
2019
2023
2009
2017
2013
2021
2025
2008
2016
2012
2020
2024
2010
2018
2014
2022
2026
1
2
3
4
5
6
0
2.09
2.99
3.13
2.58
2.50
2.63
2.49
2.37
3.05
2.87
2.53
2.88
2.50
2.50
2.78
3.12
2.80
2.43
2.65
2.48
1.66
2.50
2.47
1.63
1.31
1.79
2.59
2.03
1.48
1.55
2.40
2.57
1.78
1.38
1.66
1.63
1.48
1.48
1.48
1.47
1987 
Q1
1999 
Q1
1993 
Q1
2005 Q1
2011 
Q1
1990 
Q1
2002 Q1
1996 
Q1
2008 Q1
2014 
Q1
1988 Q3
2000 Q3
1994 Q3
2006 Q3
2012 Q3
1991 
Q3
2003 Q3
1997 
Q3
2009 Q3
2015 Q3
2017 
Q1
2018 Q3
2020 Q1
20
40
60
80
100
120
140
160
0
07
ANNUAL REPORT & ACCOUNTS 2022 
Morses Club PLC

Chief Executive Officer’s Review
Our underlying performance over the 
period is encouraging, despite the 
current challenges we are facing.
Introduction
We strategically decided to focus on our core 
strengths as a provider of credit products for 
the under-served segment of the market. We 
identified new sources of business for both 
divisions, and also opportunities to share 
learnings in processes and ways of working. 
Our digital division starting to trade profitably 
at the end of the year was a significant 
milestone.
While continuing to operate remotely, our 
people remained committed, and customers 
continued to be loyal, reflected in high levels 
of both customer satisfaction and employee 
engagement.
Performance
The underlying operational performance 
of our credit businesses was stable and 
consistent during the period. The performance 
of our e-money current account against a 
more competitive market led to a strategic 
decision to withdraw it from the market which 
we did in May 2022.
Digital
In the digital lending division, customer 
numbers exceeded 43,000 at the end of the 
period, an increase of 48% since the end of the 
prior year, (FY21: 29,000). Total credit issued 
for the period was £41.3m (FY21: £19.3m), 
a 114% increase. The gross loan book was 
£23.8m, an increase of 97% (FY21: £12.1m). 
The quality of the lending in the division 
remained high.
Trading throughout the year was strong in the context 
of robust demand for lending. We remain focused on 
delivering the opportunity to develop our future.”
Gary Marshall
Chief Executive Officer
Financial Statements
Corporate Governance
Strategic Report
08
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Customer demand was strong, with a focus 
on short-term lending during the period. 
Customer satisfaction for the division was 92% 
(FY21: N/A). Due to the IFRS 9 requirement to 
take forward-looking provisions at the outset 
of the loan period, impairment was outside the 
guidance range in H1; however, impairment 
significantly improved in H2. The overall 
impact of this resulted in impairment of 67.6% 
(FY21: £55.1m), above the guidance range of 
45% – 55%. 
The division is now primed for growth, with 
a stable platform and a significant target 
market. Month-to-month profitability was 
achieved in the last two months of FY22. Our 
growth plans in early FY23 are expected to 
increase impairment in the short term.
Home Collected Credit
The Home Collected Credit division traded 
consistently, despite the previously reported 
impact of an increase in complaints submitted 
by claims management companies. Full 
information is referenced on page 2, and 
the impact of the provision for potential 
redress liability as an exceptional item is 
detailed on page 23 of the financial review. 
We continue to monitor our credit policy on 
an ongoing basis, to keep this aligned to 
market conditions, and some tightening of 
criteria ensured the quality of our lending was 
maintained. Customer numbers of 143,000 
(FY21: 151,000) at the end of the period were 
a strong indicator of consistent demand. Total 
credit issued during FY22 was £108.0m, 9% 
above management’s budgeted plan and just 
marginally lower than the previous year (FY21: 
£109.7m). The gross loan book was £96.7m 
(FY21: £102.1m). Cash collection performance 
for the HCC division remained strong and was 
ahead of management’s budgeted plan.
The Group continues to adapt to an evolving 
HCC sector influenced by changing customer 
and regulatory needs; 66% of all lending 
is now cashless (FY21: 67%), while 81% of 
payments are cashless (FY21: 80%.) This is 
consistent with FY21, despite the easing of 
Covid-19 measures. 81% of customers were 
signed up to the customer portal, an increase 
of 16% compared to FY21 (70%). Impairment 
for the financial year is below the Company’s 
guidance range.
Customer satisfaction for the HCC division 
remained high at 97% (FY21: 98%), reflecting 
continued customer support for the evolving 
digital HCC model.
Strategy
We took the decision to close our e-money 
current account business in order to focus on 
lending, refining our strategy to focus on what 
we do best. As we grow our lending book, 
access to traditional funding will allow us to 
expand into longer-term facilities.
New customer acquisition in the HCC division 
has increasingly been using broker and online 
methods during the year, further reflecting 
the increased digital routes to market for 
the sector. With more than 81% (FY21: 70%) 
of HCC customers using our portal, through 
which they are able to complete applications 
and interact with agents online, it is now a 
question of embedding the strategy and 
ensuring that customers benefit from the level 
of utilisation they choose.
92%
CUSTOMER 
SATISFACTION 
FOR DOT DOT1
81%
CUSTOMERS NOW 
USE CASHLESS 
METHODS TO PAY 
THEIR LOAN
1. Based on independent  
satisfaction survey for Dot Dot  
from Dec 21 – Feb 22
09
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Chief Executive Officer’s Review 
continued
External market 
There has been widespread comment regarding the focus 
that the sector has received from claims management 
companies. We remain in close contact with the FCA, and 
are in discussions with the FCA regarding the continued 
development of the business with a strong willingness to adapt 
so that we continue to serve our customers post Covid, and 
comply with our regulatory obligations which are central to our 
business model.
In the current climate, with ever-increasing challenges on 
domestic expenditure and the cost of living, we expect 
significantly more people to come into the market. This 
significant consumer demand will need to be met, and this 
is against a backdrop of reduced supply. Our agents provide 
informal feedback about the general state of people’s financial 
circumstances and there have been concerning news reports 
about the number of people being forced to turn to illegal 
lenders. Our reshaped business is well positioned to support 
customers through these challenging economic times.
There has been a sharp regulatory focus on the sector, with a 
key outcome being the imminent consumer duty requirements, 
due to begin implementation in July 2023, and there are 
ongoing discussions about relending approaches.
People and culture
Although the impact of the pandemic has led to changes 
in our working model, we have worked hard to ensure that 
the customer-centric culture and focus on delivery has 
been maintained during the period. We have continued 
to stay in touch with our teams across the UK through 
regular communication and updates, to help people stay 
connected with the business, despite the changes that 
have been undertaken. 
Board changes
There have been several changes to the Board. Having been 
Morses Club’s Senior Independent Director since 2016,  
Sir Nigel Knowles took up the role of Chair with effect from 
1 March 2022, following Stephen Karle’s retirement after 
seven years. Sheryl Lawrence, who joined the Morses Club 
Board in May 2021, has assumed the position of Senior 
Independent Director.
Andy Thomson retired from the Board on 31 December 2021, 
following a period of ill-health the previous year. Andy had 
worked with Morses Club for 12 years and was appointed CFO 
in 2016, before stepping down in July 2019. Andy remained on 
the Board as a Non-Executive Director and stepped back in to 
support Morses Club as interim CFO in March 2020 for seven 
months. Joanne Lake also stepped down from the Board at 
the end of March 2022, following the completion of her second 
three-year term of office as a Non-Executive Director.
On behalf of the Group, I wish to extend our sincere thanks 
to Stephen, Andy and Joanne for their contribution to the 
business and wish them well for the future.
After a period of over two years as the Chief Operating 
Officer, with a focus on the digital division, I was delighted 
to take on the role of CEO from February 2022, following 
Paul Smith leaving the business. The strong Executive team 
which supports the Board is a healthy mix of long-standing, 
experienced colleagues, along with newer appointments as 
part of our succession planning.
Stakeholder engagement
As a Group we prioritise engaging with colleagues, to listen to 
ideas and concerns, and to ensure that everyone understands 
the direction we’re going in. With a small number of exceptions, 
overall our people prefer working from home, and our 
engagement scores have improved the longer we have done 
this. Our intention over the coming months is to move further 
towards our ambition to support being a virtual organisation 
with flexible options tailored to people’s needs. We’re a digital 
business and it makes sense to work accordingly.
In terms of values, both of our businesses are very conscious 
of doing what’s right for customers. We recognise that 
customers have financial shocks, and respond by being 
supportive. Ultimately there’s a human element to this – we 
understand people’s circumstances and act accordingly. That 
is what attracted me to the Group, and will continue to be the 
cornerstone of how we operate. We have already changed our 
affordability assessment to reflect and anticipate the increased 
cost of living. This may mean that we cannot help some 
customers with their lending needs every time, but ultimately, 
it’s the responsible thing to do. 
As part of our product development strategy, we will seek 
to reward good customers with longer-term and lower-cost 
products to help improve their financial wellbeing. 
Understanding the expectations of our stakeholders, working 
collaboratively and adapting accordingly is core to our ethos. 
We hold regular ‘town hall’ briefings and management updates 
with employees, and gather feedback via surveys, whose 
results we act upon. In particular we have taken care to seek 
the views of employees and customers as we closed offices 
to pursue a remote working model, as we are keen to adapt 
to changing needs and behaviours, while preserving what 
differentiates the organisation. The closure of our offices and 
removal of company cars as our business moved online has 
reduced our environmental impact.
Financial Statements
Corporate Governance
Strategic Report
10
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

97%
HCC CUSTOMER 
SATISFACTION1
Following the Company announcement on 
20 July regarding the potential Scheme of 
Arrangement, the Group experienced a  
higher level of unaffordable lending claims  
in the HCC division, which led the Group to 
seek a pause on the processing of claims, 
which was announced as effective from 
11 August 2022. Without this pause, it is 
Directors’ belief that the Group could have 
suffered significant near term liquidity issues, 
threatening its going concern status.
Outlook
It is the view of the Directors that the Group’s 
trading performance demonstrates a basis 
for the future viability of the Group and the 
business continues to be a going concern. 
However there remains a material uncertainty 
that may cast significant doubt about the 
future going concern and viability of the Group.
We fully recognise the current challenges that 
the business faces, particularly with regard to 
the increase in complaints liabilities, due to the 
focus on the sector from claims management 
companies. We are deeply committed to  
the sector and the customers who need  
our services as they may already have less 
choice and we are committed to ensuring  
our products are sustainable and clear to  
our addressable market. This is not due to  
any reduced ambition, but a recognition  
that a reduced product range is right for  
the sustainability of the business.
I believe that the overall long-term outlook 
for the Group is positive. We have made 
significant strides to reshape the business and 
there will be more to do as we continue our 
discussions with the FCA. I am confident that 
we can work through this in a constructive 
way, as it is important that our customer 
demographic continues to be served by 
people who understand the market and can 
operate in a socially conscious way.
As part of the future development of its 
operating model, the Company is currently 
engaging in a programme to potentially 
end the self-employed status of agents and 
replace the work with a new role of employed 
Customer Support Associates. The aim is to 
complete this process by Autumn 2022. 
Our strong management team, which includes 
a combination of people with experience 
in established businesses and those with 
experience in transitioning businesses to 
different ways of working, understands 
the need to operate at pace, and we have 
a renewed impetus on transforming the 
business to deliver sustained growth for  
both divisions.
We remain focused on continuing to build 
the trading position of the Group, and are 
confident that the changes that the business 
has made will help the business move forward 
from the challenges it currently faces. Its 
position as the only remaining HCC lender of 
scale in the UK, and the deep commitment it 
has to this sector, along with the core expertise 
in serving customers in this market will  
help its longer-term future, despite the  
impact on profitability for the period  
and impact in FY23. 
1. Based on annual independent 
satisfaction survey for HCC.
11
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Business Model
Our strengths
What we do
Technology 
Extensive investment in digital 
capabilities and services.
People and culture
Experienced team of c. 550 
employees (FY21: 560) and 
1,077 self-employed, home-
based agents (FY21: 1,385) 
– with the customer at the 
heart of what we do.
Scale
Economies of scale from a 
nationwide customer base of  
c. 186,000.
Heritage and brand
Trusted HCC brand based 
on c. 130 years of valued 
relationships with customers 
and agents.
Open communication  
with regulator
Open and constructive 
dialogue with the regulator, 
including membership of 
the FCA’s Smaller Business 
Practitioner Panel until 
February 2022.
Our vision is to provide simple, flexible credit for people 
who cannot typically access mainstream services.
  See page 18  
for more on  
our strategy
  See page 24  
for more on our  
robust risk management
  See page 44  
for more on  
our governance
#6
Loans are regularly 
monitored and potential 
issues flagged up
#5
If authorised, loans 
are paid into bank 
accounts
#4
Customer service teams 
are available to answer 
questions and help 
manage the process
#3
Extensive credit checks 
and risk assessments  
are carried out on 
affordability 
#2
Customers are credit 
scored via our platform 
and given an initial  
decision in eligibility 
#1
Customers apply 
for loans via digital 
platforms including 
app and website
Customer develops 
creditworthiness  
over time which 
enables them …
Digital  
customer  
journey
Financial Statements
Corporate Governance
Strategic Report
12
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

How we share  
value with our 
stakeholders
Our customers:
We offer affordable, convenient 
access to credit and excellent 
customer service.
Our agents:
We offer flexible and 
rewarding roles, now done 
largely remotely.
Our employees:
We have an open and 
collaborative culture with 
opportunities for development.
Our investors: 
We use retained earnings 
debt facilities to lend to our 
customers at a margin, and 
control the lending risks 
and costs in order to deliver 
shareholder returns.
97%
CUSTOMER 
SATISFACTION
92%
EMPLOYEES 
HAPPY WORKING 
FROM HOME
3.2p
ADJUSTED EPS
#1
Customers apply 
for a loan via our 
digital platform
#2
Agents support 
customers to fill out 
applications 
#3
Customers are credit 
scored via our platform  
and given an initial  
decision on eligibility 
#4 
If approved  
in principle,  
agents contact 
the customers 
to book an 
appointment 
remotely or  
face-to-face
#5
Agents conduct 
extensive 
checks and risk 
assessments  
on affordability
#6 
Once authorised, 
collection process 
is confirmed 
and payment of 
loan made into 
bank account or 
delivered in cash
#7
Loans are repaid  
via digital 
platform on 
agreed terms or 
in cash.  
We provide 
support  
to customers 
in short-term 
difficulties
… to borrow  
again or access 
other products  
and services
HCC  
customer  
journey
66%
of HCC customers now use 
remote lending model
13
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Delivering for our Customers
Our 
customers
97%
CUSTOMER 
SATISFACTION
98%
SATISFIED WITH 
MORSES CLUB 
FLEXIBILITY
95%
LIKELY TO 
RECOMMEND 
MORSES CLUB 
TO FRIENDS 
AND FAMILY
97%
LIKELY TO 
CONSIDER 
USING MORSES 
CLUB AGAIN IN 
THE FUTURE
Every time I have needed a 
loan or to change my loan 
repayments or to just talk to 
my agent, she has been really 
forthcoming with details, 
helping me understand and 
helping me if I have fallen 
behind on payments.”
My agent is brilliant. 
We communicate 
with each other, I am 
not just a number.”
I can trust Morses. 
They explain it to me 
and makes me feel 
confident in them.”
They made sure the agent 
got in contact with me within 
24 hours and made sure the 
situation got sorted.”
We have delivered consistently 
positive customer experiences as 
we have transformed the business, 
guided by ongoing customer 
feedback and our desire to maintain 
our high satisfaction ratings.
Financial Statements
Corporate Governance
Strategic Report
14
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Dot 
Dot
92%
CUSTOMER 
SATISFACTION
87%
LIKELY TO 
RECOMMEND 
DOT DOT TO 
FRIENDS 
AND FAMILY
88%
LIKELY TO 
CONSIDER 
USING DOT DOT 
AGAIN IN THE 
FUTURE
Customer services was 
very helpful and funds 
were transferred  
very quickly.”
Very quick and easy with 
no embarrassing questions. 
I was made to feel like a 
normal borrower, not a bad 
credit person.”
43k
CUSTOMERS IN 
DIGITAL DIVISION
If I ever have to talk to you guys, 
you are there to help and always 
have a friendly attitude.”
An estimated 10-12m 
consumers – 20-25% of 
UK adults – have difficulty 
accessing credit from 
mainstream financial 
institutions on account of 
an impaired or non-existent 
credit history.
15
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Employee engagement across 
the business has been very 
encouraging and our colleagues 
seem to prefer the new way  
of working.”
Delivering for our Employees
Prioritising our employees’ wellbeing, we 
increased our employee engagement  
in order to understand and address  
any concerns.
71%
REPORT 
POSITIVE 
OVERALL 
WELLBEING
82%
DESCRIBE 
WELLBEING  
AS THE SAME 
OR BETTER 
SINCE WORKING 
FROM HOME
Our 
colleagues
Financial Statements
Corporate Governance
Strategic Report
16
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

I can apportion my time  
easier. If colleagues want  
my opinion or help then  
they book in dedicated  
slots rather than wandering  
to my desk and disturbing  
at inconvenient times.”
Staff are happier, I think. 
Technology with Teams has 
made us a lot closer to other 
departments, areas and I have 
got to know more people across 
the country in different branches 
because of Teams.”
85% 
FEEL ENGAGED 
WITH MORSES 
CLUB
66%
HAVE MANAGED TO 
MAINTAIN NORMAL 
WORKING HOURS 
EVERY DAY OR MOST 
DAYS
83%
MOTIVATED TO 
DO THEIR BEST
I enjoy working from 
home, it gives me a 
much better work/
life balance.”
17
ANNUAL REPORT & ACCOUNTS 2022 
Morses Club PLC

Our Strategy
We have a clear focus
on what we do best,
offering credit and 
supporting our 
customers.
Strategic pillars
Support more 
customers 
through their 
chosen channels
Read more on pages 12 to 13
Read more on page 36
Continue to work 
ethically and in the 
interests of our 
customers’ needs 
Our purpose
drives our
strategic pillars
in order to achieve
our vision
Financial Statements
Corporate Governance
Strategic Report
18
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Strategic priorities
Progress in the year
KPIs
Subject to evolving regulatory 
requirements, we will seek to 
drive volume growth among HCC 
and digital customers, to support 
greater numbers of customers in an 
environment of increasing costs of 
living and fewer regulated providers 
of credit.
We remain committed to doing the 
right thing for our stakeholders. 
Our size enables us to be agile and 
flexible, driven by the changing 
needs of customers, colleagues 
and the regulator whilst acting in a 
professional and sustainable way. 
Safety and wellbeing continued to be 
priorities throughout the year.
We maintain a proactive and positive 
relationship with the regulator, and 
engage in regular communication.
•	
Retained blend of digital, remote 
and face-to-face lending and 
collection, and embedded cashless 
lending proposition to new and 
existing HCC customers. 81% (FY21: 
70%) of HCC customers use the 
digital customer portal.
•	
We will seek to reward good 
customers with longer-term and 
lower-cost products to improve 
their financial wellbeing.
•	
Ongoing investment in customer 
dialogue and feedback.
•	
Employees engaged during the 
year to check on wellbeing.
•	
Engaged regularly with our agents 
to support them through the 
pandemic.
•	
Withdrawal from all long-term 
property leases with the exception 
of Nottingham.
104k
HCC CUSTOMERS
USING PORTAL
We made the strategic decision to focus 
on our core area of expertise, providing 
credit to people who may not be able 
to access loans from mainstream 
lenders, and have simplified our product 
diversification strategy as a result.
19
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Despite the current 
challenges facing 
the business, 
the underlying 
opportunity for both 
trading divisions is 
strong. We continue 
to develop the 
proposition for both 
the HCC and digital 
divisions to maximise 
this opportunity.”
Graeme Campbell
Chief Financial Officer
Financial Review
Introduction
The Company Update on page 2 gives an 
overview of the key elements to the date 
of the report which currently give material 
uncertainty, with particular regard to both the 
quantum and timing of redress claims and 
funding. The option of a potential Scheme of 
Arrangement gives the opportunity to put 
the business on a more certain footing in 
controlling the claims liability. Along with other 
key stakeholders, we remain in active dialogue 
with our funders on the future direction of the 
business. The current funding consortium has 
been supportive throughout the reporting 
period and to date. 
Despite the current challenges, we remain 
confident of the market opportunities that 
continue to exist for the sector, and that our 
specific expertise in the HCC product type is 
both relevant and necessary in the current 
economic climate of the UK. 
Financial Statements
Corporate Governance
Strategic Report
20
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Overview
The underlying results for the Group for the 52 weeks ended 26 February 2022 reflect a stable financial performance, 
overcoming the many challenges presented by Covid-19 and wider market conditions, particularly with regard to the increase in 
complaint volumes received in the year in the HCC division, driven by claims management companies. Despite these challenges, 
the Group’s underlying trading performance, which excludes exceptional costs, was profit-generative overall. However, due to the 
impact of the provision of £42.6m due to the exceptional item relating to claims (see page 2 for further details) the Statutory PBT 
for the Group generated an overall loss-making position. 
The rise in complaint volumes in the HCC division received in the year led to further analysis of the root causes of these 
complaints. We engaged with an external technical expert to establish a proposal for a potential (as yet unapproved) redress 
methodology for customers who may have been affected by unaffordable lending. As a consequence the net present value of 
the cost of settling these complaints has been recognised as an exceptional item in the accounts. As management has used 
estimates of total redress due and an assumed take-up rate, details of which are included in Note 1 on page 111, there is material 
uncertainty regarding the exact quantum of this liability.
The continued impact of Covid-19 during the year created volatility of demand for our services but our customer numbers 
remained stable in HCC and increased substantially in our Digital division, with the resulting impact on the loan book. Our 
underlying debt and collection performance has been strong and we have reduced our overall cost base to mitigate the impact 
as much as possible. Administration and depreciation costs increased by £3.7m to £54.0m (FY21: £50.3m) but this included 
customer redress costs of £8.5m (FY21: £1.7m) . We also decided not to take any government support or furlough any staff during 
the period.
We have taken steps to develop our credit policies and product proposition in both divisions, tightening lending criteria and 
assessing the borrowing patterns of our customers to ensure that the risk profile of our customer base continues to be within our 
risk appetite. 
Reconciliation of Statutory loss before tax to Adjusted profit before tax and explanation of Adjusted EPS
FY22
FY21
Increase/ 
(Decrease)
£’m (unless otherwise stated)
HCC
Digital
Total
HCC
Digital
Total
Statutory (Loss)/Profit Before Tax
(35.0)
(7.9)
(42.9)
11.8 
(11.3)
0.5 
(43.4)
Restructuring and other non-recurring costs
 0.4 
 0.1 
 0.5 
 2.9 
 2.4 
 5.3 
(4.8) 
Exceptional costs2
 44.4 
 2.4 
 46.8 
–
–
–
46.8 
Amortisation of acquisition intangibles3 
0.2 
 – 
0.2 
0.3 
 – 
0.3 
0.1 
Adjusted Profit Before Tax1 
10.0 
(5.4) 
4.6 
15.0 
(8.9)
6.1 
(1.5)
Tax on Adjusted Profit Before Tax
0.6
0.7
1.3
(0.8)
(0.2)
(1.0)
2.3 
Adjusted Profit After Tax 
10.6 
(4.7) 
 5.9 
14.2 
(9.1)
5.1 
0.8
Statutory EPS1
(25.0p)
0.2p
(25.2p)
Adjusted EPS1
4.4p
3.9p
0.5p
Return on Assets1
-57.3%
-57.4%
22.0%
0.3%
Adjusted Return on Assets1
23.2%
10.1%
27.2%
8.9%
Return on Equity1
-47.5%
-77.0%
18.5%
0.4%
Adjusted Return on Equity1
19.2%
13.6%
22.8%
10.3%
1	
Definitions are set out in the Glossary of Alternative Performance Measures on pages 147 to 149.
2	
Costs relating to the complaints liability provision, corporate restructure and closure of U Account.
3	
Amortisation of acquired customer lists and agent networks.
In FY22 we achieved an adjusted profit before tax1 of £4.6m (FY21: £6.1m). Statutory loss before tax was (£42.9m) due to the 
charge in the year of (£46.8m) in exceptional costs. Statutory profit before tax last year in FY21 was £0.5m.
Following the impact of Covid-19 on the FY21 performance, HCC has demonstrated a level of stabilisation with closing customers 
down by 5.3% to 143,000 (FY21: 151,000) and period-end receivables decreasing by 9.2% to £43.6m (FY21: £48.0m). This 
resulted in adjusted profit before tax of £10.0m (FY21: £15.0m).
The Digital division recovered well from the impacts of Covid-19 with closing customers increasing by 48.3% to 43,000 (FY21: 
29,000) and revenue more than doubling, up 115% to £29.6m (FY21: £13.8m). This resulted in an adjusted loss before tax of 
(£5.4m), compared to FY21 (£8.9m).
Total equity for the Group decreased from £70.7m in FY21 to £32.2m.
21
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Financial Review 
continued
Trading summary
52-week period ended 26 February 2022
52-week period ended 27 February 2021
£’m (unless otherwise stated)
HCC
Digital
Total
HCC
Digital
Total
Customer numbers (‘000s) 
143 
43 
186 
151 
29 
180 
Credit issued
108.0 
41.3 
149.3 
109.7 
19.3 
129.0 
Period end receivables
43.6 
12.2 
55.8 
48.0 
5.5 
53.5 
Average receivables
45.7 
12.5 
58.2 
52.3 
5.2 
57.5 
Revenue
81.8 
29.6
111.4 
86.4 
13.8 
100.2 
Impairment (pre-exceptional)
(12.5)
(20.0)
(32.5)
(13.2)
(7.6)
(20.8)
Agent commission & other cost of sales
(15.1)
(0.3)
(15.4)
(20.0)
(0.6)
(20.7)
Gross Profit (pre-exceptional)
54.2 
9.3 
63.5 
53.2 
5.6 
58.8 
Administration expenses (pre-exceptional)
(40.3)
(13.1)
(53.4)
(33.8)
(12.2)
(46.0)
Depreciation
(2.5)
(1.0)
(3.5)
(3.6)
(0.7)
(4.3)
Operating Profit before exceptional items, non-recurring 
costs and amortisation of acquisition intangibles
11.4 
(4.8) 
6.6 
15.8 
(7.3)
8.5 
Amortisation of acquisition intangibles
(0.2)
 – 
(0.2)
(0.3)
 – 
(0.3)
Restructuring and other non-recurring costs
(0.4)
(0.1)
(0.5)
(2.9)
(2.4)
(5.3)
Exceptional costs
(44.4)
(2.4)
(46.8)
 – 
 – 
 – 
Operating (Loss)/Profit
(33.6)
(7.3) 
(40.9)
12.5 
(9.7)
2.8 
Funding costs
(1.4)
(0.6)
(2.0)
(0.7)
(1.6)
(2.4)
Statutory (Loss)/Profit Before Tax
(35.0)
(7.9) 
(42.9)
11.8 
(11.3)
0.5 
Tax
8.7
0.8
9.5
(0.3)
0.1 
(0.2)
Statutory (Loss)/Profit After Tax
(26.3)
(7.1) 
(33.4)
11.5 
(11.2)
0.2 
Basic EPS
-25.0p
0.2p
Group results
Credit issued to customers increased by 15.7% to £149.3m
(FY21: £129.0m) mainly because of the increased sales activity 
in the Digital business. HCC credit issued of £108.0m was a
1.5% reduction on the prior year (FY21: £109.7m), reflecting 
the continued stricter lending criteria to protect the quality of 
the loan book. Credit issued in the Digital business was also 
subject to tighter lending criteria, but despite this, credit issued 
increased by 114.0% to £41.3m (FY21: £19.3m).
Revenue increased by 11.2% to £111.4m (FY21: £100.2m)
due primarily to the increased credit issued in Digital. HCC
revenue decreased by 5.3% to £81.8m (FY21: £86.4m).
Digital revenue increased by 114.5% to £29.6m (FY21: £13.8m).
Gross profit (pre-exceptional) increased by 8.0% to £63.5m 
(FY21: £58.8m). The gross profit (pre-exceptional) percentage 
decreased to 57.0% from 58.7% in FY21. The HCC impairment 
(pre-exceptional) charge as a percentage of revenue increased 
to 19.6% (FY21: 15.3%) and remains below our guidance range 
of 21% to 26%. This is due to a favourable impact from a 
shrinking loan book under IFRS 9 and tighter lending criteria. 
The Digital impairment charge as a percentage of revenue 
of 67.6% (FY21: 55.1%) remains above the upper end of our 
guidance range of 45% to 55% of revenue. This is the result of 
the significant growth in the loan book and broker commission 
costs being offset against revenue in line with  
IFRS 9.
HCC self-employed agent commission costs decreased by 
24.5% to £15.1m (FY21: £20.0m), and as a percentage of 
revenue they decreased to 18.5% from 23.1% in FY21 as a result 
of the loan book reducing during Covid-19 and a reduction in 
commission rates. Administration expenses and depreciation 
increased by £3.7m to £56.9m (FY21: £50.3m), while as a 
percentage of revenue they increased to 51.1% (FY21: 50.2%). 
This is due to customer redress costs of £8.5m being reported  
in administration costs (FY21: £1.7m reported in cost of sales) 
and broker costs of £1.7m being reported in cost of sales  
(FY21: £0.0m). A provision of £2.8m (FY21: £2.0m) for customer 
redress and Financial Ombudsman (FOS) fees has been 
recognised in recognition of outstanding complaints at the end 
of the period. In estimating the FY22 provision, management 
have incorporated historical Company information for the 
average percentage of complaints which are upheld, the 
average value of compensation claims paid out and the number 
of outstanding complaints that remained unresolved at the 
balance sheet date. This was then trued-up by £1.0m to £2.8m 
based on information available up until the reporting date.
Adjusted profit before tax decreased to £4.6m from £6.1m in 
FY21. HCC adjusted return on assets decreased from 27.2% in 
FY21 to 23.2% in FY22.
Restructuring and other non-recurring costs of £0.5m 
 (FY21; £5.3m) relate to redundancy and office closures.
Financial Statements
Corporate Governance
Strategic Report
22
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Exceptional costs were £46.8m (FY21: £Nil) relating to the 
recognition of: an unaffordable lending complaints liability and 
related loan book write-off totalling £42.6m (FY21: £Nil); as 
well as £4.2m (FY21: £Nil) relating to the proposed corporate 
restructure which was halted in December 2021; and the pre 
year-end decision to withdraw the e-money current account  
(U Account) and close the resulting operational elements 
effective as at 3 May 2022.
Funding costs of £2.0m were £0.4m lower than FY21 reflecting 
the lower level of borrowings throughout FY22.
The statutory loss before tax for FY22 was (£42.9m) 
compared to a statutory profit before tax of £0.5m in FY21.
Earnings per share
The adjusted earnings per share for FY22 was 4.4p, a 
decrease of 13% relative to the adjusted earnings per share 
of 3.9p for FY21. The reported loss per share for FY22 was 
(25.0p), relative to the reported earnings per share of 0.2p  
for FY21.
Dividend
The Company will not be recommending the payment of a  
final dividend for FY22. 
Funding
In May 2021 we successfully reached agreement with a new  
two-lender consortium, providing a more cost-efficient and 
reduced £35m facility (FY21: £40m), now extended to  
31 March 2023. The new facility continues funding our existing 
HCC products, in addition to unlocking funding for our Dot Dot 
loan products and helping the business achieve its immediate 
strategic objectives.
In FY22 borrowing peaked at £28.6m in December 2021 
(December 2020: £22.5m of the £40m limit).
Management are currently in ongoing discussions with the  
existing lenders regarding an extension to the existing funding 
arrangement which would provide sufficient cash flow to meet 
the future needs of business as per the forecast. However, the 
Directors note that this is yet to be formally agreed and this, 
together with the extension or deferral of the term-out and 
with the impact of levels of redress relating to unaffordable 
lending claims to the HCC business, creates a material 
uncertainty that may cast significant doubt about the Group’s 
and Company’s ability to continue as a going concern such that 
it may be unable to realise its assets and discharge its liabilities 
in the normal course of business.
We draw attention to note 1 in the financial statements, which 
indicates that the Group’s current facility of £35m expires on 
31 March 2023. Discussions continue with lenders regarding 
the covenants within the facility, the extension or temporary 
deferral of the term-out clause which would be enacted by the 
end of September 2022 and would place restrictions on the 
ability of the Group to issue new loans and the facility’s possible 
extension. This term-out clause is pre-existing and essentially 
provides assurance to the funders of the repayment of the 
facility within the last 6 months of the agreed term. In practice, 
this has the effect of converting the rolling credit facility to a term 
loan. This would mean that any subsequent collections made 
on the loan book, would be ringfenced to pay down the facility, 
less any operational costs the business has. Therefore, it would 
place restrictions on the business with regard to the issue of 
new loans. Discussions with the lenders have already led to a 
temporary deferral of the testing of two covenants from August 
to September 2022, to allow time for further discussions. 
These two covenants are linked to profitability and, if tested, 
are likely to fall outside of covenant range. There has been no 
breach, nor waiver of covenants up until the date of the report. 
The Board recognises that as the current funding facility is in 
place for less than 12 months following the date of signing the 
Financial Statements there is also material 
uncertainty regarding secured funding.
Balance sheet
The total equity for the Group has decreased from £70.7m
in FY21 to £32.2m driven by the recognition of the complaints 
liability. The Group’s main asset is our loan book, which has 
increased on a net basis by 4.3% to £55.8m (FY21: £53.5m).
Summarised balance sheet £’m
FY22 
FY21
Loan book
55.8 
53.5 
Goodwill
12.9
12.9
Bank borrowings
(19.2)
(8.3)
Cash at bank
6.2
8.3
Other net assets
(23.5)
4.4
Total Equity
32.2
70.7
Cash flow
The simplified cash flow statement below illustrates the cash  
generated by the business. Cash from operating activities 
decreased by 102.4% to (£0.8m) (FY21: £33.1m), with net 
borrowing increasing by £10.9m (FY21: decreased by £25.5m), 
as a result of the loan book growth.
Summarised cash flow £'m
FY22
FY21
Cash (outflow)/inflow from operating 
activities
(0.8) 
 33.1 
Net borrowing increase/(decrease)
10.9 
 (25.5)
Net cash outflow from investing activities
(4.3)
(6.4)
Dividends paid
(5.3)
(1.3)
Other net cash flow movements
(2.6) 
 (3.5) 
Decrease in cash and cash equivalents
(2.1)
 (3.6)
Complaints 
The increased volume of complaints in the HCC division, largely  
from the activity of claims management companies continues 
to be an area of review and close attention in relation to the 
cost base of HCC. Total costs relating to complaints received in 
the year for FY22 were £11.3m (FY21: £1.9m).
Due to the emerging position relating to complaints the 
Directors accept there is a liability in relation to customer 
redress claims for unaffordable lending against the Company 
at the balance sheet date. There is material uncertainty of the 
total liability which may be paid due to the methodology for 
assessing the population of claims which is yet to be agreed, 
and the level of subsequent customers who may claim against 
that methodology is based on management estimates. Based 
on these estimates a liability of £39.1m has been recognised 
and £3.5m has been written off the gross loan book in the 
FY22 accounts. The total of £42.6m is shown as an exceptional 
item in the Income Statement.
Outlook
Changes in the market have meant that we are now the  
leading UK proponent of HCC. Our long heritage in this sector 
and expertise, loyalty and dedication of our teams provide a 
bedrock of stability in how we develop our approach to this core 
product. Our Digital division now has an established operating 
model which we believe can grow. 
Demand for our products is positive, as is the trading outlook  
for the Group, providing the factors creating material 
uncertainty are resolved. 
23
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Principal risks are a risk or a combination  
of risks that, given the Group’s current 
position, could seriously affect the 
performance, prospects or reputation  
of the Group in the future.
They include those risks that could materially 
threaten our business model, performance,  
solvency or liquidity, or prevent us from 
delivering our strategic objectives.
The Board has overall responsibility for 
ensuring that risk is managed appropriately 
across the Group.
The Board, primarily through its Risk &  
Compliance Committee, has established 
the Group’s risk appetite and strategy, and 
approved its frameworks, methodologies, 
policies, and roles and responsibilities.
The Group’s approach to risk management is 
underpinned by the ‘Three Lines of Defence’ 
model which is summarised in the diagram 
opposite.
Responsibility for the First Line of Defence 
resides with the front-line business divisions 
and functions (e.g. Operations and Finance). 
Line managers are directly accountable for 
identifying and managing the risks arising in 
their functional or business areas.
The Second Line of Defence comprises 
the Group’s central and independent risk 
management and compliance functions 
with responsibility for oversight, compliance 
monitoring and financial crime, reporting to 
the Board’s Risk & Compliance Committee 
and the Executive Risk Committee. This is led 
by the Risk and Compliance Director, who 
reports to the Chair of the Risk & Compliance 
Committee and to the CEO.
The Third Line of Defence includes an 
Internal Audit function which reports to 
the Chair of the Audit Committee and is 
independent of the First and Second Lines 
of Defence. The priorities of the Internal 
Audit function are agreed by the Board’s 
Audit Committee and Risk & Compliance 
Risk Management
1st Line of Defence
Responsible for:
•	
Performance and 
monitoring of front-line 
control activities across the 
business.
•	
Identifying and managing 
the risks arising in functional 
or business area.
Ownership
•	
Field operations –  
divisional managers, area 
managers and customer 
relationship managers.
•	
Central operations.
•	
Banking and finance.
2nd Line of Defence
Responsible for:
•	
The Group’s central 
and independent risk 
management and 
compliance functions with 
responsibility for oversight, 
compliance monitoring and 
financial crime.
•	
Supporting and challenging 
the business via control 
activities.
•	
Independently reviewing the 
effectiveness of front-line 
control activity.
Ownership
•	
Risk and Compliance 
Director, reporting to: Chair 
of the Risk & Compliance 
Committee and the CEO.
•	
Horizon scanning by senior 
personnel.
3rd Line of Defence
Responsible for:
•	
Independently assessing 
and assuring
	
–
Internal control 
framework
	
–
Risk management 
effectiveness
Ownership
•	
Internal Audit Department, 
which reports to the Chair of 
the Audit Committee and is 
independent of the First and 
Second Lines of Defence.
•	
External accountants 
undertake a quarterly audit 
on behalf of the Group’s 
external lenders.
Committee, and focus on (i) high residual 
risks and (ii) those risks that have been 
significantly reduced by Group actions 
and procedures. In addition, external 
accountants undertake a quarterly review 
on behalf of the Group’s external lenders. 
The Internal Audit function has been 
primarily outsourced during the year.
During the year, the Group has reviewed 
its risk management framework in order 
to ensure that priority is given to the most 
important risks.
The Group maintains a risk register 
covering the entire business. Risks 
are rated according to the probability 
of occurrence and potential impact. 
Each risk is assigned to an appropriate 
individual and all mitigation and action 
plans are recorded. Risks and their status 
are reviewed regularly, and the Risk & 
Compliance Committee has performed 
robust risk assessments continually during 
the year.
Following the Covid-19 lockdowns, more 
customers have been opting to be looked 
after remotely. When lending remotely, 
we have minimised the risk of application 
fraud by making sure all customers 
are properly identified according to 
Anti-Money Laundering Regulations 
and Joint Money Laundering Steering 
Group Guidance. For additional security, 
the remote lending procedure requires 
customers to log in to their own secure 
portal account, using unique customer 
credentials, in order to execute the loan 
and receive their funds.
The report of the Risk & Compliance 
Committee on pages 69 to 71 sets out the 
procedures used by the Board to manage 
the Group’s risks.
Financial Statements
Corporate Governance
Strategic Report
24
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Key
R1 	
Conduct risk
R2 	
Regulatory risk
R3 	
Credit risk
R4 	
Reputational risk
R5 	
Strategic and business risk
R6 	
Wider industry contagion risk
R7 	
Operational risk
R8 	
Liquidity risk
R9 	
IT and cyber risk
R10 	
Agents’ self-employed status
R11 	
Covid-19 pandemic
R12 	
Increased cost of living 
R13 	
People risk
R14 	
Impairment risk
LIKELIHOOD
Low
High
IMPACT
Low
High
Principal Risks  
and Uncertainties
The principal risks faced by 
the business by risk category 
are as shown below
Increase
No change
Decrease
R1 – CONDUCT RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk of poor outcomes for 
customers, by:
•	
Offering inappropriate 
products.
•	
Failing to assess affordability.
•	
Failing to identify vulnerable 
customers.
•	
Failing to show forbearance if 
customers struggle with their 
repayments.
Treating Customers Fairly is a fundamental part of the Company’s culture.
Comprehensive and verifiable training and oversight of agents and staff, 
in both the HCC and Digital divisions, is undertaken.
First and second-line quality assurance operates alongside an 
automated, mobile technology-based sales & collections process.
During the year, the HCC division has implemented enhanced 
affordability procedures incorporating additional external data.
This, together with the new loan optimisation system, has enhanced 
our affordability process and the customer journey for agents and 
customers at the point of sale.
The HCC division enhanced the digital loan process to facilitate  
remote lending.
The Group has fully embedded the policies and procedures required by 
the Senior Managers and Certification Regime.
The Group has put in place a 
risk mitigation framework to 
ensure that the Group’s conduct 
throughout the year minimises 
the risk of poor outcomes for 
customers. 
Increased risk due to increase 
in claims being received from 
CMCs.
R2 – REGULATORY RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk of legal or regulatory 
action resulting in fines, penalties, 
censure or other sanction or legal 
action arising from failure to 
identify or meet regulatory  
and legislative requirements.  
This also includes the risk that  
new regulation(s) or changes 
to the interpretation or 
implementation of existing 
regulation(s) may affect the 
Group’s operations and cost base.
A gap analysis is undertaken when any rules or regulatory guidance 
changes.
Governance, risk and compliance are independently and externally 
reviewed by our lawyers.
We maintain continuous communication with key external stakeholders 
and professional contacts to keep our information updated.
The business is continuing to review its lending approach in light of the 
FCA relending study and the Woolard Review that looked at change and 
innovation in the unsecured credit market.
During the year, the Digital division appointed a new Head of 
Compliance, reporting to the Group’s Risk & Compliance Director.
On 20 July 2022, the Company announced it is engaging with the FCA 
regarding a potential Scheme of Arrangement and its future business 
model.
The HCC sector has come under 
closer scrutiny from the FCA 
during the last 12 months.
R10 
R8
R1
R3
R5
R7 
R14 
R11
R13
R12
R2
R4
R6
R9 
25
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

R3 – CREDIT RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk of default on a debt may 
arise from a borrower failing to 
make the necessary payments. 
The primary risk lies with the lender 
and includes lost principal and 
interest, disruption to cash flow, 
and increased collection costs. 
Group policy prescribes business oversight and control.
Weekly management information allows the Group to monitor the effects 
of lending decisions.
Regular reviews of policies and outcomes are undertaken by the  
Credit Risk Committees of the HCC and Digital divisions.
Projected higher inflation has been taken into account when  
reviewing a customer’s affordability.
 
The risk has increased due to 
higher consumer costs. However, 
there have been no noticeable 
adverse outcomes. The subject is 
being monitored closely.
R4 – REPUTATIONAL RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk of loss due to damage 
to, or a decline in, the Group’s 
reputation.
Effective corporate governance provides business oversight and control.
We undertake independent monitoring, for example market surveys.  
In 2022, we continued surveys of all types of customers, including  
those who benefited from our policy of forbearance.
 
The higher level of complaints 
and the consequent reduction in 
profits and share price.
R5 – STRATEGIC AND BUSINESS RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk arising from poor business 
decisions, substandard execution 
of decisions, inadequate resource 
allocation, and/or from failure to 
adapt sufficiently to changes in the 
business environment.
Examples could include:
•	
Acquisitions stretching 
resources beyond capability.
•	
Failure to maintain the 
Company’s competitiveness  
in its markets.
•	
Inadequate corporate 
governance.
A full Committee-based corporate governance structure operates  
with Board oversight.
The Board and Executive Team hold an annual two-day strategy planning 
meeting.
Detailed strategic planning and oversight are implemented alongside 
horizon scanning.
The recruitment application process for additional staff, prior to interview, 
is highly automated and efficient.
We are involved in lobbying through our trade associations.
The Group continues to minimise the risks to the health and safety of our 
customers, employees and agents. All staff continue to operate from 
home effectively and the HCC business is able to lend and collect both 
remotely and through doorstep activities.
There have been no material 
changes to this risk.
R6 – WIDER INDUSTRY RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
This risk can arise from concerted 
action by claims management 
companies (CMCs) which can lead 
to a significant increase in the level 
of complaints being raised against 
the Group, whether they are 
ultimately settled or rejected.
The increased cost of each FOS 
claim, whether the complaint is 
upheld or not.
The Group has recognised a 
provision for the cost of fully 
settling complaints and FOS 
fees in relation to outstanding 
complaints at the balance sheet 
date.
Provident Financial PLC and Non 
Standard Finance PLC have both 
left the HCC sector.
During the year, the Group has seen further increases in the level of 
complaints received from CMCs, principally impacting on the HCC division. 
Levels of claims are closely monitored, and the Company has made 
changes to its credit policy and lending approaches in line with customer 
and market demand. This includes the introduction of breaks in lending, 
further assessments of affordability before loan issuance, monitoring 
payment performance requirements as well as continuing to assess the 
terms and value of each loan for each customer’s circumstances. 
The Company has continued to experience increases in claims submitted 
from claims management companies, and as a result, the Company 
announced on 20 July 2022 that it was engaging with the FCA regarding 
a potential Scheme of Arrangement, in order to ensure the best outcome 
for customers. A potential Scheme would be prepared in consultation with 
a customer committee and would require (a) the approval of the requisite 
majority of affected customers, and (b) the approval of the Court. The FCA 
will be consulted extensively throughout. 
It is anticipated that, if a Scheme is proposed, a separate Group company 
would be responsible for managing the Scheme and paying the claims. 
If the Company does decide to pursue a Scheme, affected customers 
would be notified by way of a letter, called a Practice Statement Letter. 
Subsequently, if it proceeds, full details of the Scheme, including the claims 
methodology and a timetable for claims, adjudications and settlements 
would be made available to affected customers.
Claims management 
companies are becoming  
more active in the financial 
services sector.
Principal Risks and Uncertainties 
continued
Financial Statements
Corporate Governance
Strategic Report
26
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

R7 – OPERATIONAL RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk of loss arising from 
inadequate or failed procedures, 
systems or policies, employee 
errors, system failure, fraud, or 
other criminal activity – indeed 
any event that disrupts business 
processes.
Business continuity plan fails to 
maintain customer service.
The Group has a comprehensive suite of policies and procedures covering 
its operational activities that is subject to regular review and revision.
All agents and staff participate annually in a personal safety review and 
follow our home/remote working policy.
A comprehensive business continuity policy and procedure is in place and 
a third-party disaster recovery site is now available should it be required. 
Disaster recovery tests are performed periodically on critical systems.
In the event of future Covid-related, or other pandemic, restrictions, we 
continue to operate with a model that enables our agents to lend and 
collect remotely where appropriate. 
We continue to offer a remote lending product, which is available to all 
existing Morses Club HCC customers and is compliant with all regulatory 
requirements. All necessary checks and agreements are transacted via 
our online Customer Portal. Customers are able to have funds deposited 
directly into their bank account or in cash at their home if required. 
Employees in both divisions continue to be principally based from home.
Assessment of credit risk was also reviewed to ensure that risk appetite 
for credit risk and TCF were maintained.
The Company is in discussions with the FCA regarding the development of 
its future business model.
The Company continues its 
discussions with the FCA and 
other stakeholders regarding its 
future product set and business 
model. There is an increased risk 
pending a successful conclusion 
to these discussions.
R8 – LIQUIDITY RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk of the Group being unable 
to meet its current and future 
financial obligations  
on time. 
In May 2021 we successfully reached agreement with a two-lender 
consortium for a more cost-efficient and reduced £35m facility, extended 
to December 2022. This facility continues to provide funding for our 
existing HCC products and also unlocked funding for our Dot Dot loan 
products. These arrangements were extended to 31 March 2023. The 
Group is currently in discussions with its lenders to extend its borrowing 
facility further.
Management has shared forecasts with the two lenders with a view to 
extending the current facility post March 2023. Discussions continue 
with lenders regarding the covenants within the facility, the extension or 
temporary deferral of the term-out clause which would be enacted by 
the end of September 2022 and would place restrictions on the ability 
of the Group to issue new loans and the facility’s possible extension. This 
term-out clause is pre-existing and essentially provides assurance to the 
funders of the repayment of the facility within the last 6 months of the 
agreed term.
The risk is seen as increased 
pending any agreement to 
extend the Group’s funding past 
31 March 2023.
R9 – IT AND CYBER RISK 
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk of business interruption 
from cyber crime or system 
failures.
IT/Cyber risks include:
•	
IT systems and networks 
can be damaged and/or 
information can be lost owing 
to third-party actions.
•	
Data protection/information 
security issues occur or 
there is a failure to meet 
the requirements of data 
protection regulation/
legislation (e.g. GDPR).
•	
Strategy and architecture 
risk arising from inadequate 
requirements and business 
analysis.
•	
Outsourced supplier risk  
arising from the use of  
external IT platforms.
•	
Major change impacts on daily 
business and/or results in poor 
quality delivery.
The Group has an ongoing programme to conduct regular vulnerability 
assessments against our core infrastructure services. The Group 
recognises the increased relevance of this risk as the move to digitise the 
business continues and has plans to increase the frequency and scope of 
its testing.
We have a dedicated information security resource and undertake 
penetration testing of our external and internal networks which helps to 
identify new or emerging security concerns. During the year, the Group 
successfully completed its annual disaster recovery test, simulating a total 
loss of data centre and the successful failover of all production systems 
to the disaster recovery site. This covered both of the HCC and Digital 
divisions. 
Since the outbreak of Covid-19 we have engaged with suppliers to ensure 
increased resilience for all key IT services.
During the year, we have undertaken phishing exercises in order to 
educate our staff. 
All of our data is now encrypted at rest.
The business change team closely monitors demand and resource plans.
The risk is seen as increased 
owing to the increase in the 
number of cyber attacks globally, 
the potential for cyber attacks 
from Russia, plus the increase  
in the volume of online business.
27
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

R10 – AGENTS’ SELF-EMPLOYED STATUS
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The previous risk that employment 
and/or tax legislation changes 
to such an extent that the HCC 
division cannot maintain self-
employed status for its agents has 
been replaced by the risk relating 
to the process of converting 
agents from a self-employed 
status to that of being employees.
The HCC division is currently engaging in a programme to potentially end 
the self-employed status of agents and replace the work with a new role 
of employed Customer Support Associates. The aim is to complete this 
process by Autumn 2022.
The risk of having self-employed 
agents is being reduced, but 
any risk arising from the change 
process itself is the reason for 
there being no overall reduction 
in the risk this year. 
R11 – COVID-19 PANDEMIC
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
The risk that normal business is 
significantly affected by Covid-19 
by restricting face-to-face contact 
with customers, reducing the 
number of staff working from 
offices and reducing the demand 
for loans.
The Group has adopted a hybrid position of remote working, supported by 
office facilities in Nottingham. With robust IT platforms, flexible operating 
processes and strong BCP procedures that have been successful 
throughout the Covid-19 period, the Group is able to adjust to any future 
restrictions brought about by variants of Covid-19 or any other pandemic. 
Lockdowns no longer in 
place. Hybrid working used 
successfully.
R12 – INCREASED COST OF LIVING
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
Due to the increased cost of living, 
especially for food and energy, 
there is a risk that our customers 
are unable to repay their loans.
The Group has tightened its affordability policies to take into account the 
increased cost of living for new loans.
The current indications are that existing loans are not being materially 
affected by the increased cost of living.
Increased prices may result in 
customer loans not being repaid.
R13 – PEOPLE RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
High staff turnover, especially 
within IT and Customer Services.
The Group continues to monitor its onboarding process and the results of 
its salary benchmarking. Outsourcing is undertaken where appropriate. 
The Group’s remote working strategy also allows flexibility when recruiting.
Staff more mobile with hybrid 
working.
R14 – MODEL RISK
DEFINITION
RISK MITIGATION
RESIDUAL MOVEMENT DIRECTION
Shelby Finance impairment 
model risk.
Much work has been undertaken in association with KPMG in developing a 
new impairment model for the Shelby Finance division. Formal monitoring 
and governance over this model are being developed.
New impairment model.
Principal Risks and Uncertainties 
continued
Emerging risks
The Group uses proactive risk management in order to evaluate 
current and future events and predict where emerging risks 
might appear. This horizon scanning is fundamental to being 
able to predict business needs and potential issues and there 
are numerous techniques for this process.
Risk identification exercises are performed as part of general 
risk management practice within the Group.
Current events are highlighted and analysed, for example, 
regulatory fines to other organisations. 
This is then reported on at executive level as a horizon  
scanning item for Risk Executive reports.
Other future business, economic, political or newsworthy events 
are also highlighted and added to the horizon scanning process.
Risks identified using these processes are prioritised and 
managed following the Group’s established risk processes.  
In the vast majority of cases, the Group sees risks change  
and develop rather than emerge. However, climate change  
can be seen as an emerging risk.
Financial Statements
Corporate Governance
Strategic Report
28
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Emerging risk
Commentary
Climate change Climate change is not currently seen as a principal risk to the business, but this is kept under review.
During the last year we have:
•	 reduced the quantity of properties that we occupy;
•	 reduced our transport and fuel usage considerably;
•	 installed LED lighting, sensor lighting and thermostat heating at our support centre; and
•	 installed sensor lighting and blind fittings to the windows at our Leeds site.
Customers can request loans and make payments under the new customer portal. Technology has been introduced 
to allow meetings to be conducted remotely. Both of these initiatives have dramatically reduced the need to travel. The 
Group’s SECR Report can be seen on page 41. This shows a very significant reduction in the intensity ratio, due to the 
reduction in travel and office costs.
As part of our procurement procedures, we undertake a due diligence review of major suppliers, which includes standard 
aspects around modern slavery and their environmental policies. In this way, we aim to ensure that any outsourcing 
arrangements are based on working with suppliers who adhere to our operating standards. 
Viability Statement
The Directors and the Audit Committee consider a 12-month horizon 
as part of the going concern assessment (page 66), but in addition 
the Directors consider the Group’s longer-term viability as part of 
their continuing programme of monitoring risk. For the purpose of 
assessing the future prospects of the Group, the Directors have 
selected a three-year timeframe. This timeframe has been selected 
as it corresponds with the Board’s strategic planning horizon.
The assessment has been made, at the date of signing these 
accounts, with reference to:
•	
the Group’s financial position for the year ended  
26 February 2022 including the current funding position and 
the Directors’ expectation that funding will be available; 
•	
the Group’s strategy and business plan;
•	
the Board’s risk appetite;
•	
the Group’s principal risks and uncertainties and how these are 
identified, managed and mitigated;
•	
the Company’s complaints liability, accepting the material 
uncertainty regarding quantum and timing of settlement;
•	
the Group’s going concern assessment; and
•	
the external environment that the Group operates within.
The strategy for the Group and its business model are detailed in 
the Strategic Report on pages 12 to 19. HCC is a long-established 
offering, and parts of the Group have been undertaking this 
business for more than 130 years. The Group’s Dot Dot Loans is a 
fully online lending provider, which was launched in March 2017.  
The product offering aims to serve the needs of two segments of 
the lending market.
The Directors review and renew the three-year strategic plan at 
least annually. Progress against the strategic plan is reviewed 
at every meeting by the Board through presentations from 
the Executive Management Team on the performance of their 
respective business units, the assessment of market opportunities, 
and the consideration by the Board of its ability to fund its 
strategic ambitions.
In addition to standard internal governance, the Group is also 
monitored against key financial covenants tied in with current 
funding facilities. These are produced and submitted on a monthly 
basis with key schedules included in the monthly Board papers.
The Group’s underlying trading position is profitable. It currently 
has a revolving debt facility of £35m secured by a debenture 
on the assets of the business which expires at the end of March 
2023. Discussions continue with lenders regarding the covenants 
within the facility, the extension or deferral of the term-out 
clause which would be enacted by the end of September 2022 
and would place restrictions on the ability of the Group to issue 
new loans and the facility’s possible extension. This term-out 
clause is pre-existing and essentially provides assurance to the 
funders of the repayment of the facility within the last 6 months 
of the agreed term. In practice, this has the effect of converting 
the rolling credit facility to a term loan. This would mean that 
any subsequent collections made on the loan book, would be 
ringfenced to pay down the facility, less any operational costs the 
business has. Therefore, it would place restrictions on the business 
with regard to the issue of new loans. Discussions with the lenders 
have already led to a temporary deferral of the testing of two 
covenants from August to September 2022, to allow time for 
further discussions. These two covenants are linked to profitability 
and, if tested, are likely to fall outside of covenant range. There 
has been no breach, nor waiver of covenants up until the date of 
the report. 
The Group has proven itself to remain resilient and profitable 
through challenging market conditions, such as the Covid-19 
pandemic when the closed economy lowered demand for our 
services and caused our customer base and the loan book to shrink. 
Despite this, performance of underlying debt and collections was 
very strong.
The Group has observed a noticeable increase in the level of 
complaints received in particular from CMCs during the year. The 
Directors therefore accept there is a liability in relation to Redress 
Claims at the balance sheet date, recognising that there is a 
discernible trend, although there is significant uncertainty regarding 
the quantum and timing of the total liability which will be paid. 
Consequently this level of complaints falls outside the risk framework 
that the Board has set.
As part of its annual planning process, the Group assessed its 
business plans and subsequently ran a number of scenarios 
around the key areas of sensitivities, namely:
•	
Loan volumes and credit risk
•	
Collections and loan book quality
•	
Complaints volumes
•	
Cash availability
•	
Collect-out out scenario (in accordance with Regulatory 
guidance)
A number of scenarios were modelled in respect of both the 
quantum and timing of settlement of the complaints liability. 
In the base case forecast, this settlement is orderly and continues 
until FY26, with a reduction in complaint volumes over the coming 
months. In a second scenario, it was assumed settlement of the 
liability is via a potential Scheme. This would also ensure orderly 
payment of all liabilities as they fell due, and would allow the Group 
to continue to trade. A third scenario modelled higher customer 
claims, with the resultant strain on cash leading to a cessation of 
trading and a subsequent collect-out scenario.
Having considered these scenarios and assumptions, the Directors 
consider that the underlying profitability of the Group means that 
the business is viable. This takes into account the need to resolve the 
material uncertainty relating to funding, term-out clause, and the 
quantum and timing of settling complaints costs. 
As discussed in the Risk Management report, the Board, primarily 
through its Risk & Compliance Committee, has established the 
Group’s risk appetite and strategy, and approved its frameworks, 
methodologies, policies, and roles and responsibilities. The Group 
maintains a risk register covering the entire business. Risks and their 
status are reviewed regularly, and the Risk & Compliance Committee 
has performed a robust risk assessment during the year.
Conclusion
Although the Board confirms that it expects the Group to continue 
to operate and meet its liabilities as they fall due over the three-year 
period of assessment, this is within the context that the material 
uncertainty that may cast significant doubt about the Group’s and 
Company’s ability to continue as a going concern (as detailed on 
page 2) is resolved. 
29
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Stakeholder Engagement and s172
Our Key Stakeholder Groups
Engaging with our 
Stakeholders
Customers
We have adapted our business to continue 
to meet our customers’ evolving needs.
Agents
Our network of agents develops valued 
relationships with customers.
Employees
Our experienced, diverse and dedicated 
workforce is core to the success of our 
business. We continue to seek to encourage 
and create opportunities for our people to 
realise their career aspirations.
Suppliers
Our suppliers provide the goods and services to 
enable us to meet our customers’ needs, playing a 
vital role in our operations.
Debt providers
Our providers of debt facilities, along with 
our retained earnings, allow us to lend 
money to customers at competitive rates.
Regulator and 
government
The nature of our customer base and the market 
in which we operate means it is critical to maintain 
open and trusting dialogue with policy makers 
and our sector regulator, the FCA, critical to a 
sustainable business model.
Financial Statements
Corporate Governance
Strategic Report
30
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Listening and engaging helps us to create a 
better business and improve outcomes for our 
internal and external stakeholders, including 
society and the environment. The Board 
also proactively engages with stakeholders 
including customers, employees, debt 
providers and investors to understand their 
views across a range of issues; see pages 32 
to 33 for more information.
In the table overleaf we set out our key 
stakeholder groups, the material issues that 
matter to them and how we engage with 
them. By understanding our stakeholders, 
we can factor into boardroom discussions 
the potential impact of our decisions on each 
stakeholder group and consider their needs 
and concerns.
The Board’s statement on s172
The Board of Directors, in line with their 
duties under s172 of the Companies Act 
2006, act in a way they consider, in good 
faith, would be most likely to promote the 
success of the Company for the benefit of its 
members as a whole, and in doing so, have 
regard to a range of matters when making 
decisions for the long term.
Key decisions and matters that are of strategic 
importance to the Group are informed by s172 
considerations.
The subjects of s172 and Directors’ duties are 
included together as a standing item on the 
agenda of every Board meeting.
Through an open and transparent dialogue 
with our key stakeholders, we are able to 
develop a clear understanding of their 
needs, assess their perspectives and 
monitor their impact on our strategic 
ambition and culture. As part of the Board’s 
decision-making process, the Board and its 
Committees consider:
a)	Long-term impacts
The likely consequences of any decision in 
the long term
b)	Our employees
The interests of the Group’s employees
c)	 Our business relationships
The need to foster relationships with 
suppliers, customers and others
d)	The community and environment
The impact of our operations on the 
community and the environment
e)	 Our reputation
The importance of maintaining a reputation 
for high standards of business conduct
f)	 Acting fairly
The need to act fairly between members of 
the Company.
To secure our long-term success, 
it is important to engage with our 
stakeholders and take account of 
their perspectives. 
83%
EMPLOYEES 
MOTIVATED TO 
DO THEIR BEST
31
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Stakeholder Engagement and s172 
continued
OUR 
STAKEHOLDERS
WHAT MATTERS TO THEM
HOW WE ENGAGE
HOW THEY LINK 
TO OUR STRATEGY
CUSTOMERS
•	
Affordable and accessible 
credit. 
•	
Simple, transparent fee 
structure, with no penalties or 
late payment charges. 
•	
Support and forbearance 
during short-term difficulty.
•	
Monthly customer satisfaction survey, 
the results of which are reviewed by 
the Board.
•	
Quarterly good customer outcomes 
survey. 
•	
Survey across a randomised selection 
of customers to gather views on how 
well the service operates at each 
stage of the loan issue and collection 
service, as well as the service delivered 
by agents. The HCC division achieved 
an overall score of 97% across all six 
divisions, and has maintained this 
score across the year.
Non-standard customer base 
central to our business model and 
strategy.
Digitalisation of service based on 
market demand and customer 
need.
AGENTS
•	
Ability to work flexibly. 
•	
Support and tools to work 
efficiently, effectively and 
flexibly. 
•	
Competitive remuneration.
•	
Regular virtual meetings with 
Managers.
Provide interface with customers 
and maintain relationships with 
our target demographic. Link to 
local communities and ensure 
that we offer best-in-class service 
responsibly and in line with our 
customer needs.
EMPLOYEES
•	
Opportunities for personal 
development and career 
progression. 
•	
A culture of inclusion and 
diversity. 
•	
Competitive remuneration 
and benefits.
•	
Open, collaborative culture with 
regular Group updates and 
opportunities for questions and 
feedback. 
•	
Annual appraisal process. 
•	
Regular surveys and a detailed cultural 
review during the year to monitor 
engagement and ensure adaptations 
to working practices are in line with our 
cultural values and customer service 
needs. 
•	
Whistle-blowing hotline, available to all 
employees.
Increased cross-functional 
working across the Group to 
deliver a cohesive customer 
service and digital strategy. 
Ensure that our service model 
responds to customer needs.
SUPPLIERS
•	
Professional relationship, 
adhering to contractual terms. 
•	
Alignment of business 
culture and values, including 
operating responsibly.
•	
Due diligence conducted for all 
suppliers. 
•	
Monitoring of quality of products and 
services. 
•	
Review of policies and procedures in 
place. 
•	
Regular contact through procurement 
and account management. 
•	
Annual reviews of the service and 
regular feedback.
A range of suppliers used to 
support our products and services. 
Ensure that our suppliers provide 
products and services in line with 
the needs of our business and 
customers.
DEBT PROVIDERS
•	
Financial performance. 
•	
Transparency. 
•	
Proactive communication. 
•	
Credit rating.
•	
Monthly covenant reporting including 
loan book quality analysis. 
•	
Monthly submission of finance Board 
papers and additional schedules. 
•	
Regular calls to discuss current 
performance and future expectations. 
•	
Quarterly independent review of 
lending process and loan book quality.
Funding solutions to support 
the development of our overall 
business strategy.
Financial Statements
Corporate Governance
Strategic Report
32
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

OUR 
STAKEHOLDERS
WHAT MATTERS TO THEM
HOW WE ENGAGE
HOW THEY LINK 
TO OUR STRATEGY
REGULATOR AND 
GOVERNMENT
•	
Transparent communication 
with the regulator. 
•	
Proactive approaches on any 
regulatory matters. 
•	
Clear TCF approaches in line 
with the market sector and 
customer needs.
•	
Regular dialogue with the regulator. 
•	
Proactive communication with the 
regulator regarding our approaches 
on lending and remote working. 
•	
Respond proactively to feedback 
requests. 
•	
Member of the Smaller Business 
Practitioner Panel through the CEO 
until February 2022.
•	
Programme of contact with MPs 
through the CEO to share insights 
and ensure the business model is 
understood.
Delivery of regulatory framework 
that supports good customer 
outcomes. Ensure that our 
products and services are 
delivered responsibly and ethically.
SHAREHOLDERS
•	
Positive cash generation, 
and established long-term 
dividend policy. 
•	
Responsible, sustainable and 
low-risk business model and 
strategy.
•	
Twice-yearly virtual road shows by 
the CEO and CFO at the time of the 
interim and annual results. 
•	
Ad hoc queries and feedback from 
shareholders, dealt with by the CFO. 
The Chair and the Senior Independent 
Director also make themselves 
available, and discuss feedback at 
Board meetings.
Support of our ongoing strategic 
direction for our targeted 
customer demographic.
COMMUNITIES 
AND 
ENVIRONMENT
•	
Responsible lending and 
collecting of repayments. 
•	
Helping local economies by 
promoting financial inclusion. 
•	
Fundraising for local charities. 
•	
Minimising environmental 
impact.
•	
Acting in a fair and responsible 
manner is a core element of our 
business. Read more on page 34. 
•	
The Group’s SECR Report is on page 
41.
Presence in communities across 
the UK to support the needs of 
our customers. Fulfil our strategic 
direction of growing the business, 
whilst delivering our commitment 
to deliver products and services 
responsibly and ethically.
How stakeholders influenced Board 
decision-making
We define principal decisions as those that 
are material to the Group, but also to any 
of our key stakeholder groups. In making the 
principal decisions outlined below, the Board 
considered the outcome from its stakeholder 
engagement as well as the need to maintain 
high standards of business conduct and 
to act fairly between the members of the 
Company. The Board’s procedures have 
been updated to require a stakeholder 
impact analysis to be completed for all 
material decisions requiring its approval 
that could impact on one or more of our 
stakeholder groups. The stakeholder impact 
analysis assists the Directors in performing 
their duties under s172 of the Companies 
Act 2006 and provides the Board with 
assurance that the potential impacts on our 
stakeholders are being carefully considered 
by management when developing plans for 
Board approval.
The Board continued to review the 
operational impact of the ongoing 
pandemic, and continued to support the 
development of systems and processes to 
ensure that customers were supported both 
digitally and with in-person services where 
Covid-19 restrictions allowed. The Board 
was updated on the summary results of the 
annual employee engagement survey. The 
Board also supported the strategic decision 
to focus the Group’s product strategy on 
the provision of credit products, rather than 
broader financial services, which led to the 
decision to withdraw the e-money current 
account product from the Group’s portfolio.
33
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Environmental, Social and Governance
Operating responsibly 
has always been at 
the heart of our ethos, 
and is key to achieving 
our purpose and 
strategic objectives. 
Our new sustainability framework  
formalises our existing approach  
to responsible business and helps us  
identify focus areas.” 
Gary Marshall
Chief Executive Officer
Doing the right thing for our stakeholders 
is extremely important to us, and we are 
committed to operating ethically and 
responsibly. Our culture and values, strong 
governance and risk management shape  
our approach to responsible business. 
Responsible business and the Group’s 
performance on ESG matters are overseen 
by the Board, and are standing items on 
Board meeting agendas. As we develop our 
approach further, we plan to establish  
a Board Responsible Business Committee.  
Operational responsibility for the framework 
sits with the Executive Committee and in 
particular: 
•	
The CEO has overall responsibility 
for governance, ethics and business 
conduct.
•	
The Group HR Director leads initiatives 
focused on our employees including 
culture, diversity, equality and inclusion 
and employee engagement, along 
with devolved responsibility for health 
& safety, environmental policy and 
charitable activity. 
Financial Statements
Corporate Governance
Strategic Report
34
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Lending 
responsibly
•	
Responsible lending
•	
Governance
•	
Protecting customer data
•	
Customer outcomes and satisfaction 
Caring for our 
people and 
communities 
•	
Employee engagement
•	
Health, safety and wellbeing
•	
Working experience
•	
Diversity, equality and inclusion 
•	
Supporting our communities 
Reducing our 
environmental 
impacts
•	
Carbon emissions, energy usage  
and efficiency
•	
Fuel and company car usage
•	
Waste management
Focus areas during FY22
Particularly in light of the significant changes to 
our business and ways of working over the last 
two years, we recognised the need to review 
our approach to responsible and sustainable 
business to ensure we focus our efforts on 
issues that are material. 
During the year, particular focus areas were the support  
of our employees during the continued impact of Covid-19,  
as well as ensuring that we continued to support our 
customers, adapting our service model in line with the 
government guidance in the four countries of the UK. 
Key focus areas for FY23
•	
Develop our responsible business approach by aligning 
with the UN Sustainable Development Goals (SDGs) 
and outlining commitments and targets.
•	
Develop our strategy on managing climate change 
and work towards compliance with the Task Force on 
Climate-related Financial Disclosures (TCFD).
•	
Enhance our focus on equality and inclusion in 
everything we do, including how to attract, retain and 
develop colleagues, and how we engage with others. 
•	
Further reduce the environmental impact of our 
operations.
•	
Continue to support local and national charities through 
donations and supporting our colleagues in their 
fundraising activities.
Find out more on pages 41 to 43
35
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Environmental, Social and Governance 
continued
Lending  
approach to 
customers
We strive to adhere to evolving 
industry standards and have a 
constructure dialogue with the 
regulator to ensure that we comply 
with regulations as they develop
Governance
Our business operations are supported by 
the Three Lines of Defence model, which 
have been strongly embedded since our IPO 
in May 2016. We engage with various third 
party stakeholders, and audit partners to 
monitor and oversee our activity across a 
wide range of aspects. 
 
We have clear policies on various elements 
relating to responsible lending and our wider 
business practices. These are available on  
our website and include:
•	
Responsible lending
•	
Financial difficulties 
•	
Vulnerable customers
•	
Fair collections
•	
Conduct risk
•	
Data protection
•	
Information security
Lending approach
The FCA’s Treating Customers Fairly 
principles are the foundation of our 
approach, and responsible lending runs 
through our customer journeys and the 
lending process. We assess every loan 
application against strict criteria, taking into 
account affordability and credit checks. A 
complete income and expenditure check 
is undertaken for every loan, and we 
only lend to customers able to afford the 
repayments. Last year, 71% (FY21: c. 75% )
of loan applications were not progressed. 
Terms and conditions and other information 
relating to loans are clearly displayed and 
understandable. Our charging structure is 
clear and uncomplicated, with no penalties 
or fees for missed or late repayments. 
Our self-employed agents are paid in 
commission based on collections, not sales. 
Financial Statements
Corporate Governance
Strategic Report
36
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 
36

Protecting customer data
The confidentiality, integrity and availability  
of personal information are key to the  
success of our business, and we take data 
protection, data privacy and information 
security extremely seriously. 
To demonstrate commitment and 
accountability for our data protection 
obligations, we maintain a Personal 
Information Management System (PIMS). 
This is part of our broader internal controls 
framework and enables the Group to 
meet data protection legislation and our 
own data protection requirements for the 
management of personal information. Our 
data protection policy is reviewed at least 
once a year or earlier if there is a change 
in legislation/regulation or process that 
impacts the policy.
As outlined in our Risk Report on page 71, we 
plan to increase the frequency and scope 
of the regular vulnerability assessments we 
undertake against our core infrastructure 
services, in light of the increasingly digital 
nature of our business and the prevalence of 
cyber attacks in wider society.
Training and advice are provided to all 
employees and agents on their data 
protection obligations at induction 
and at least once per year as part of a 
comprehensive programme of regulatory 
and development training for all our 
employees. 
97%
MORSES CLUB 
OVERALL CUSTOMER 
EXPERIENCE SCORE 1
92%
OF DOT DOT LOANS 
CUSTOMERS 
SATISFIED OR VERY 
SATISFIED2
Customer 
outcomes and 
satisfaction
During the year we continued our 
programme of monthly customer satisfaction 
surveys for Morses Club and introduced 
monthly customer experience surveys for 
Dot Dot Loans and were delighted to receive 
consistently positive scores.
We closely monitor the number and nature 
of complaints and seek to address these in a 
timely manner.
1. Morses Club Good Customer Outcomes Survey, 2022
2. Dot Dot Loans Customer Experience Research,  
December 2021 – February 2022
See page 14
37
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Environmental, Social and Governance 
continued
Caring for our people 
and communities
We seek to provide a 
safe, open and inclusive 
working environment for 
all of our colleagues. We’re 
grateful for their continued 
dedication and flexibility 
during the challenges of the 
past two years, which have 
confirmed that our culture is 
one of our greatest assets. 
This is reflected in our 
engagement scores, but 
also in the enthusiasm with 
which colleagues support 
our communities with 
charitable giving and  
more broadly.
Employee engagement
Each year we undertake an employee engagement survey 
to give colleagues an opportunity to provide feedback and 
suggestions on an anonymous basis. In 2020 we commissioned 
Mustard to conduct an additional online survey to understand 
how employees were feeling and their experiences of working 
from home during lockdown. In summer 2021 we undertook 
follow-up research to understand how attitudes had changed 
and explore feelings towards future hybrid working, highlights of 
which are outlined below: 
•	
86% of employees surveyed indicated that they were coping 
well working from home, up from 76% during May/June 2020. 
•	
More than 80% of employees felt engaged with Morses Club 
and reported that their overall wellbeing was the same or 
better than before they started working from home. 
•	
Nine out of ten employees were positive about the support 
they had received from their line manager, with 68% classifying 
it as ‘excellent’ overall. All areas of the business showed an 
improvement year-on-year. 
•	
Just 3% of employees had a preference to be office-based, 
with the vast majority (81%) expressing a preference to continue 
to work from home. 
•	
A third of staff felt that they would need to access office space 
at least once a month, with the remainder indicating that 
this need would be less often. These findings have helped to 
continue to develop our office space, which is now limited to a 
Nottingham contact centre, and two temporary office spaces 
in Leeds and Sheffield. We will continue to monitor employee 
wellbeing through tailored feedback mechanisms.
Financial Statements
Corporate Governance
Strategic Report
38
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Culture
We are proud of our culture, and have been mindful 
of preserving and nurturing this as our working 
practices have undergone significant change during 
the course of the Covid-19 pandemic. The frequency 
of our employee surveys allowed us not only to assess 
wellbeing and satisfaction with working from home, 
but also to evaluate factors that might compromise or 
indeed enhance our organisational culture. We were 
encouraged that 80% of respondents to our summer 
2021 employee survey described their experience 
of keeping in touch with colleagues in their team as 
‘good’ or ‘excellent’, with the corresponding figure for 
colleagues in other areas of the business being 66%, 
with many saying that Teams has allowed them to get 
to know more people around the business. 
In summer 2020 we formalised and refined our 
practices to develop a cultural barometer, which 
we are now developing as part of our framework of 
development. Read more about this on page 52.
Employee shares
Employee share ownership is a valuable way to 
share the success of the business with colleagues. 
In January 2021, employees received Morses Club 
shares following the vesting of their 2017 share award. 
The HCC division also issued shares to employees in 
2018 and 2019 under a replacement Share Incentive 
Plan, representing 3.25% of base annual salary 
in shares. This plan was recognised by ProShare, 
winning one of their awards in 2019. No new shares 
were issued during FY21 due to the Group failing to 
meet its FY20 adjusted profit before tax target, but 
an award of 3.25% of base salary was made again 
in December 2021 to qualifying employees in both its 
HCC and Digital divisions. The Group intends to repeat 
this in future years, subject to the Group’s profitability.
Working experience 
We continue via Teams throughout our 
working day. We have a Tea & Coffee catch up 
on a Monday. Daily WFH calls, team meeting 
on a Wednesday and a Friday quiz last thing. 
Our team continues to have the rapport and 
team dynamic we had prior to WFH.” 
Central Operations team member
3.25%
AWARD OF THE BASE 
SALARY WAS MADE 
IN DECEMBER 2021 
TO EMPLOYEES
39
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Environmental, Social and Governance 
continued
Health, safety  
and wellbeing
The health, safety and wellbeing of our 
employees and the self-employed agents 
we work with are paramount. The majority of 
our workforce continued to work largely from 
home throughout the year, and we adhered 
to evolving government guidance in relation 
to Covid-19 measures to ensure the safety 
of agents entering customers’ homes.
All our employees have access to the 
Perkbox platform, which offers employees 
rewards and offers, as well as confidential 
advice and assistance. In our most recent 
employee survey 71% of employees 
reported positive overall wellbeing, with the 
proportion describing it as ‘excellent’ almost 
doubling since the previous survey. 
Diversity, equality 
and inclusion
Our business can thrive only if we nurture 
an inclusive and diverse culture in which 
colleagues of all backgrounds feel valued, 
confident to contribute their ideas, and have 
opportunities to fulfil their potential. We 
live by our Company values and cherish our 
diversity, whether that relates to gender, 
race and ethnicity, sexual orientation, gender 
identity and expression, disability, marital 
status, age, nationality, religion, thought, 
belief, experience or expression.
Supporting our 
communities
In addition to the indirect contribution we 
make to communities across the UK by 
facilitating financial inclusion for people 
unable to access credit from mainstream 
lenders and providing business opportunities 
for self-employed agents, we also raise 
money for good causes. During the year, 
we donated c. £7,000 to a variety of local 
and national charities, and plan to donate 
a further £5,000 to the British Heart 
Foundation in relation to surveys completed 
during the year. For FY23, we have chosen 
to support the Trussell Trust to raise money 
in memory of Mark Jakeman, our Operations 
Director who sadly died in January 2022.
71%
OF EMPLOYEES 
REPORTED POSITIVE 
OVERALL WELLBEING, 
£7,000
DONATED TO A 
VARIETY OF LOCAL 
AND NATIONAL 
CHARITIES DURING 
THE YEAR
Financial Statements
Corporate Governance
Strategic Report
40
ANNUAL REPORT & ACCOUNTS 2022 
Morses Club PLC 
40

Reducing our 
environmental 
impacts
In addition, we had already made the decision to  
remove all leased company cars, replacing this with a 
car allowance to employees who need a car for business 
purposes. This will be complete by the end of December 
2023. 
 
The shift to remote working over the last two years has also 
allowed us to significantly reduce our consumption of paper 
and office supplies. During the period we used 1.2 million 
sheets of paper, down from almost 14 million sheets two 
years previously. 
 
Methodology
Our GHG emissions reporting period is 28 February 2021 to 
27 February 2022, in line with our financial reporting year. 
We consider that the most appropriate intensity ratio for our 
business is tonnes of CO2 equivalent (tCO2 e) per number of 
full-time equivalent employees. 
The organisation took guidance from the UK Government 
Environmental Reporting Guidelines (March 2019), the 
GHG Reporting Protocol – Corporate Standard, and from 
the UK Government GHG Conversion Factors for Company 
Reporting document for calculating carbon emissions. 
The closure of almost all of our  
offices has allowed us to deliver 
marked improvements to our 
environmental impact, including 
reducing our emissions and waste. 
Carbon emissions, energy usage and 
efficiency, and our climate impact 
When changing our property strategy, we sought to 
balance the practical needs of our employees and business 
with the need to ensure that our changes support the UK 
government target of being carbon neutral by 2050. 
 
This section includes our mandatory reporting of 
greenhouse gas emissions in line with the Companies Act 
2006 (Strategic Report and Directors’ Report) Regulations 
2013 and the Streamlined Energy and Carbon Reporting 
(SECR) under the Companies (Directors’ Report) and 
Limited Liability Partnerships (Energy and Carbon Report) 
Regulations 2018. 
 
Initiatives to reduce our impact
Having reduced our long-term lease estate commitments 
from around 90 sites to one in the previous year, during 
the period we reduced the office premises that we occupy 
on a short-term lease to one in Leeds, and our transport 
and our transport and fuel usage reduced considerably. 
Our Nottingham office had LED lighting, sensor lighting and 
thermostat heating installed, and we installed sensor lighting 
and blind fittings to the windows at our Leeds site. 
41
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Environmental, Social and Governance 
continued
Methodology continued
Energy usage information (gas and electricity) was obtained directly from our energy suppliers and half-hourly (HH) 
data, where applicable, for the HH supplies (there was no estimation profiling required). For tenanted properties where 
the energy usage was not available we estimated consumption using the CIBSE guidelines. Transport mileage data was 
obtained from expense claims submitted for our company cars and employee-owned vehicles. CO2e emissions were 
calculated using the appropriate emission factors from the UK Government GHG conversion information.
Emissions source
2021-2022
2020-2021
2019-2020
Scope 1 (tCO2e)
Natural gas
25
26
117
Fuel for transport purposes
17
309
1,216
Total Scope 1 emissions (tCO2e)
42
335
1,333
Total Scope 2 emissions (tCO2e)
Electricity
49
70
121
Total Scope 3 emissions (tCO2e)
Employee-owned cars 
23.6
Not measured
Not measured
Total emissions (tCO2e)
114
405 (Scope 1 + 
Scope 2 only)
1,454 (Scope 1 + 
Scope 2 only)
Intensity ratio – tCO2e per number 
of employees
0.21
0.74 
2.53
Notes: 
1. tCO2e = Tonnes of CO2 equivalent. 
2. All activities are UK-based. 
3. Conversion to carbon rates used current Department for Education, Food and Rural Affairs (DEFRA) factors. 
4. Calculations were carried out by Consultus International Group Limited. 
5. Scope 3 emission figures include business travel, employee commuting and domestic energy usage to support staff working from home. 
Task Force on Climate-related Financial Disclosures (TCFD) 
TCFD reporting is important to help us enhance our understanding both how climate change could affect our business and 
any impacts that our business could have on the climate. Work is underway to develop a roadmap towards TCFD reporting 
with the aim of ensuring that the Group can meet TCFD requirements. The first steps on our roadmap are outlined below:
•	
Conduct risk assessment and report on climate-related risks and opportunities.
•	
Set up and report on our governance framework for overseeing climate change strategy within the business, aligned to 
ESG governance.
•	
Start to consider how to undertake scenario planning and develop our strategy for managing climate change. 
Fuel and company car usage
The sustained shift in customer behaviour towards greater use of digital channels meant that we were able to further reduce 
our company car fleet during the period, from 273 to 30 vehicles.
 
Financial Statements
Corporate Governance
Strategic Report
42
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 
42

Waste management
We saw a substantial reduction in confidential waste during the financial year as greater numbers of customers opted to engage 
with us via our customer portal. The combined volumes of our general waste – all of which is repurposed – and that disposed of in 
skips were temporarily distorted during the process of closing the vast majority of our offices. As more customers engage with us 
digitally and we further transition to a more virtual way of working we anticipate our waste to reduce to negligible levels.
Waste (tonnes)
2021-2022
2020-2021
2019-2020
General 
1.6
1.4
26.9
Confidential 
1.7
5.6
34.9
Skips
4.5
43.5
2.0
Move to cashless/digital transactions
Transactional cash use across the UK fell from more than 50% of payments in 2010 to only 17% of all payments in 2020, with the 
trend accelerating during the Covid-19 pandemic (source: Bank of England). This societal decline in usage of cash is reflected in 
the preferences of our customers, who responded positively to the remote lending product we launched early in the pandemic. 
This cashless proposition and the unique circumstances of lockdowns led to a marked drop in the cash we gave out in loans to 
our customers between FY20 and FY21, and the figure remained stable over the last year. Similarly, the number of plastic cards 
we issued to customers dropped to a fraction of previous levels as customers have become more comfortable with alternative 
payment methods.
2021-2022
2020-2021
2019-2020
Cash given out in loans (£ million)
108.0
109.7
172.4 
Plastic cards (thousand)
3.3
34.0
62.1
We consider our community 
responsibility in delivering 
services across the UK, 
working to maximise our 
service to customers and 
minimise our environmental 
impact.”
43
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Corporate 
Governance
Contents
Corporate Governance
46	
Board of Directors
48	
Chair’s Introduction to Governance
50	
Corporate Governance Report
58	
Nominations & Succession Committee Report
62	
Audit Committee Report
69	
Risk & Compliance Committee Report
72	
Remuneration Report
77	
Disclosure Committee Report
78	
Directors’ Report
82	
Directors’ Responsibilities
Financial Statements
Corporate Governance
Strategic Report
44
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

45
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Gary Marshall
Chief Executive Officer 
Date of appointment
22 July 2019 as COO. 1 May 2021  
as Executive Director.  
Appointed CEO on 21 February 2022
Sir Nigel Knowles 
Chair 
Date of appointment
14 April 2016 as Senior Independent 
Director. Appointed Chair on  
1 March 2022
Graeme Campbell 
Chief Financial Officer 
Date of appointment
1 January 2021
Background and Career 
When first joining the Company, Gary was 
given responsibility for leading the integration 
and development of the digital business, 
Shelby Finance, including the delivery of 
new platforms which could effectively meet 
customer demand as the business grows. 
Gary also took on overall responsibility for the 
Group’s IT and Change functions. In February 
2022, Gary was appointed Group CEO. 
Prior to joining the Company, Gary was 
Interim COO of Sainsbury’s Bank, a role 
he held for almost two years, with a focus 
on IT, information security, call centres, 
operations and business change. Prior 
to this, he held various roles at Aviva plc, 
including Interim COO of Aviva Ireland and 
Interim Managing Director of Aviva Life & 
Pensions Ireland where he quickly digitised 
the business, turning it around to become 
the fastest growing insurer in Ireland. 
Areas of Expertise
Gary has wide-ranging financial services 
experience, having worked at senior levels in 
organisations including Egg plc, GE Capital, 
Aon Ltd, Santander Plc, Vertex, Anglo Irish 
Bank and Northern Rock. He has extensive 
expertise in both developing and delivering 
digitised product offerings, with significant 
customer-focused experience often in 
challenging regulatory and market conditions.
Background and Career 
Sir Nigel is a solicitor and CEO of global 
legal business DWF Group PLC. Sir Nigel is 
the former Global Co-Chairman and Senior 
Partner of DLA Piper, having served as Global 
Co-CEO and Managing Partner for nearly 
20 years.  He is credited with DLA Piper’s 
remarkable growth, leading the firm through 
a series of mergers and taking the firm from 
its regional origins to the global firm that it is 
today. He received a knighthood in 2009 in 
recognition of his services to the legal industry. 
Legal Business awarded Sir Nigel a “Lifetime 
Achievement Award” in 2015 and he was given 
the Financial News “Editor’s Choice” award 
for lifetime achievement in 2016. Sir Nigel is 
special advisor on international trade and 
investment to the City of Sheffield’s Mayor, 
Dan Jarvis, and served as the High Sheriff 
of Greater London from 2016 to 2017.
Areas of Expertise
Sir Nigel has immense experience 
of building and leading a worldwide 
regulated services business.
Background and Career 
Graeme was previously the Chief Financial 
Officer of BrightHouse (a trading name of 
Caversham Finance Limited) which provided 
rent-to-own and cash lending services to 
the UK consumer market. Graeme became 
the CFO of BrightHouse in 2018. He joined 
the Company in 2011 and held a number 
of roles including Director of Finance as 
well as the Strategy and Digital Director, 
and Chief Information Officer, during 
which he spearheaded the financial, IT and 
emerging digital strategy of the business. 
Prior to this, he held senior finance roles 
at Virgin Media and Thresher Group.
Areas of Expertise
Graeme brings a wealth of highly relevant 
sector and financial experience, along with 
broader digital and commercial skills, which 
will be invaluable to Morses Club as the Group 
looks to adapt its business during the  
coming years.
Board of Directors
The Board and its committees are considered to have an 
appropriate balance of skills, experience, independence 
and knowledge to enable them to discharge their 
respective duties and responsibilities effectively.
Financial Statements
Corporate Governance
Strategic Report
46
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Background and Career 
Sheryl is a chartered accountant (FCA) and 
holds an LLM from the Institute of Advanced 
Legal Studies and an MBA from London 
Business School. She has held senior executive 
roles at Barclays, Lloyds Bank, Santander, 
Coventry Building Society, Nationwide Building 
Society and Provident Financial Group. Sheryl 
began her banking career at NatWest Bank in 
1996, after 11 years of multi-sector experience 
with Coopers & Lybrand (now PwC). 
Sheryl has been an Independent Non-
Executive Director of RCI Bank UK since 
January 2019, where she is Chair of the 
Board Audit Committee and Chair of the 
Nomination and Remuneration Committee. 
Sheryl was appointed the Senior 
Independent Director and Chair of the 
Risk Committee at Distribution Finance 
Capital Holdings plc on 16 May 2022.
Areas of Expertise
Sheryl has extensive experience of designing, 
integrating and embedding governance, risk 
and compliance into the culture, commercial 
strategies and operations at banks, building 
societies and consumer lending firms. 
Background and Career 
Michael is a career banker and has over 
40 years’ experience in the financial 
services industry, serving in the building 
society, retail bank and investment bank 
sectors. He has extensive executive, 
board and NED experience. 
Throughout his career he has been heavily 
involved in business transformation as both 
an employed executive and then as an 
independent board consultant advising 40 or 
so boards. He has international and cross-
industry experience and has been involved 
in policy development for HM Government. 
Earlier, Michael spent 17 years at Cheltenham 
& Gloucester Plc, culminating in the position of 
General Manager, helping to grow C&G from 
the 16th largest building society into a Global 
100 bank and the UK’s 3rd largest lender. 
Areas of Expertise
Michael brings extensive experience of the 
retail banking sector. He is a change leader 
with a career track record of leading significant 
business transformations who has consistently 
driven double-digit revenue growth and 
profitability. One of his personal objectives 
is to make financial services accessible to a 
wider, less well served, sector of society. 
Background and Career 
Peter is the Co-Founder of RCapital Partners 
LLP and retired as an active Partner in 2016. 
In 2001 he co-founded his own corporate 
advisory business, Three V Corporate 
Venturing LLP, to provide fundraising and 
interim management services. He had 
previously held senior management positions 
within the UK commercial and banking division 
of Royal Bank of Scotland Group for 23 years. 
Areas of Expertise
Peter has extensive experience of working 
with management teams across a 
broad range of business sectors.
Sheryl Lawrence
Independent Non-Executive 
Director 
Date of appointment
Appointed NED 1 May 2021 and Senior 
Independent Director on 1 March 2022
Michael Yeates
Independent Non-Executive 
Director 
Date of appointment
1 May 2021 
Peter Ward 
Non-Executive Director 
Date of appointment
1 March 2015
47
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Chair’s Introduction to Governance
Robust governance 
provides a sound 
foundation for 
delivering on our 
strategy and ensuring 
the Group’s success.”
Sir Nigel Knowles
Chair
Financial Statements
Corporate Governance
Strategic Report
48
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

I wish to thank Stephen, Andy and Joanne for 
their significant contributions to the Group and 
wish them all well for the future.
After more than two years as the Chief 
Operating Officer, Gary Marshall took up 
the role of CEO from 21 February 2022, 
succeeding Paul Smith. The depth of his digital 
expertise has been a valuable asset to the 
Group and will be key to the next phase of the 
business’s growth. 
Culture and stakeholder engagement
Having significantly adapted our ways of 
working in response to the Covid-19 pandemic 
over the last two years, we have been able to 
build a more connected and resilient business, 
which is testament to our strong corporate 
culture. Following careful consultation with 
employees and customers, the decision was 
taken to retain the new ways of working such 
that colleagues continue to operate largely 
remotely. The safety, health and wellbeing 
of employees and self-employed agents 
continues to be of paramount importance. 
We use surveys to monitor wellbeing and 
the effectiveness of working from home, and 
continue to monitor customer satisfaction 
closely. 
During the year, the Board has been in regular 
contact with both the Group’s funders and its 
regulator. 
Annual General Meeting
This year’s AGM will be held on 4 October 
2022 at 10.30am. Further details can be 
found in the Notice of AGM accompanying this 
Report. 
On behalf of the Board, I would like to thank 
all shareholders and colleagues for their 
continued support in delivering our purpose, 
and I look forward to the year ahead.
Sir Nigel Knowles
Chair
25 August 2022
I am pleased to write to you in my new 
capacity as Chair, to present the Corporate 
Governance report for the year ended  
26 February 2022.
Board changes
I took up the role of Chair on 1 March 2022 
following Stephen Karle’s retirement. Stephen 
had been Chairman of Morses Club since 
January 2015. He led the Group through its 
successful IPO and supported its transition 
from a pure home collected credit provider 
to including a strong digital lending business. 
Sheryl Lawrence, who joined the Morses Club 
Board in May 2021, has assumed my previous 
position of Senior Independent Director. 
Michael Yeates joined as Independent Non-
Executive Director at the same time as Sheryl. 
Both Sheryl and Michael bring extensive 
financial services experience to the Board, and 
during the financial year they were appointed 
Chair of the Audit Committee and Chair of the 
Risk & Compliance Committee, respectively.
Andy Thomson retired from the Board on  
31 December 2021, following a period of ill-
health the previous year. He had worked with 
Morses Club for 12 years and was appointed 
CFO in 2016, before stepping down in July 
2019. Andy remained on the Board as a Non-
Executive Director and supported the Group 
as interim CFO for seven months from March 
2020. Joanne Lake also left the Board at the 
end of March, following the completion of her 
second three-year term of office as a Non-
Executive Director.
49
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Corporate Governance Report
Except as stated below, throughout the year ended  
26 February 2022, the Company has complied with the 
provisions set out in the Code. The exceptions are: 
i.	
the Directors’ Remuneration Report, where the 
Company does not comply with Provisions 36, 40 or 41 
as a result of it having been prepared in accordance 
with AIM Rule 19; 
ii.	
Provision 11 of the 2018 Code that requires at least half 
the board, excluding the Chair, to be independent non-
executive directors. From 1 April 2022, the Company 
had two Independent Non-Executive Directors. 
Although not compliant with the Code, the Board 
believes that this is an appropriate arrangement for the 
time being for a company of the size and capitalisation 
of Morses Club. This will be kept under review; 
iii.	 During the period from the resignation of Leslie Easson 
as Non-Executive Director on 17 March 2021 until  
22 September 2021 when Sheryl Lawrence was 
appointed Designated Director for employee 
engagement, the Company did not comply with 
Provision 5 requiring a Non-Executive Director to be 
responsible for employee engagement; and 
iv.	 Following the departure of Joanne Lake as Non-
Executive Director and Chair of the Remuneration 
Committee on 31 March 2022, the role of 
Remuneration Committee Chair was taken by Sir Nigel 
Knowles, the Chair of the Board. Sir Nigel has spent 
more than two years as a member of the Company’s 
Remuneration Committee, and therefore provides 
continuity to the role. However, this breaches Provision 
32 of the Code that states that the Chair of the Board 
cannot chair this committee. 
As required by AIM Rule 26, details of the Company’s 
adherence to the Code are shown on its website. The Directors 
have been fully briefed about the requirements of the 
Code, and the Company Secretary continually monitors the 
Company’s adherence to it.
By applying the principles, following the more detailed 
provisions, and using the associated guidance, a company can 
demonstrate through its reporting how the governance of the 
company contributes to its long-term sustainable success and 
achievement of its wider objectives. 
Five of the main principles of the Code are as follows: 
A.	 A successful company is led by an effective and 
entrepreneurial board, whose role is to promote the long-
term sustainable success of the company, generating value 
for shareholders and contributing to wider society. 
B.	 The board should establish the company’s purpose, values, 
and strategy, and satisfy itself that these and its culture 
are aligned. All directors must act with integrity, lead by 
example, and promote the desired culture. 
C.	 The board should ensure that the necessary resources 
are in place for the company to meet its objectives and 
measure performance against them. The board should also 
establish a framework of prudent and effective controls, 
which enable risk to be assessed and managed. 
D.	 In order for the company to meet its responsibilities to 
shareholders and stakeholders, the board should ensure 
effective engagement with, and encourage participation 
from, these parties. 
E.	 The board should ensure that workforce policies and 
practices are consistent with the company’s values and 
support its long-term sustainable success. The workforce 
should be able to raise any matters of concern. 
Application of the UK Corporate Governance Code 
The 2018 Corporate Governance Code can be found in the 
Corporate Governance Code section of the FRC website, www.
frc.org.uk. 
From the date of the Initial Public Offering in May 2016, the 
Directors have voluntarily adopted the principles and provisions 
of the Code, although, being AIM listed, the Group is not obliged 
to comply with this. 
At the heart of the Code are five main 
principles that emphasise the value  
of good corporate governance to 
long-term sustainable success.
Financial Statements
Corporate Governance
Strategic Report
50
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Principle A – Effective Board 
Role of the Board 
The Company is headed by an effective Board that is 
collectively responsible for the long-term success of the 
Company. 
The Board’s role is to provide entrepreneurial leadership of the 
Group within a framework of prudent and effective controls 
that enables risk to be assessed and managed. 
The Board sets the Group’s strategic aims, ensuring that the 
necessary financial and people resources are in place for 
the Group to meet its objectives, and reviews management 
performance. 
Since its IPO in 2016, the Board has established a sub-
committee structure comprising Audit, Risk & Compliance, 
Remuneration & Corporate Social Responsibility,  
Nominations & Succession, and Disclosure Committees,  
with Sir Nigel Knowles in the role of Senior Independent 
Director. The role of Senior Independent Director was given  
to Sheryl Lawrence on 1 March 2022, upon the appointment  
of Sir Nigel as Board Chair. 
Opportunities and risks to the future success of the business 
are considered and addressed at each Board meeting, with 
the CEO highlighting the challenges and successes in each 
report to the Board. In the past, when specific risks were 
highlighted, for example relating to a potential acquisition, 
the Risk & Compliance Committee held special meeting(s) to 
consider the matter before the Board made a final decision. 
In Q1 2022, the Board’s Risk & Compliance Committee reviewed 
and reassessed the Group’s risk appetite statements and 
target residual ratings for each of the principal risks, all of which 
are included within the risk management system. Details of the 
Company’s principal risks are included on pages 25 to 28. 
The Executive Management Committee, comprising all of the 
Executive Managers and the Executive Directors, reports to  
the Board. 
Division of responsibilities 
There is a clear division of responsibilities at the head 
of the Company between the running of the Board and 
the responsibility of the Executives for the running of the 
Company’s business. In this way, no individual has unfettered 
powers of decision. 
The Board has a formal schedule of matters reserved to it 
and is scheduled to hold six formal meetings during the year. 
In addition, two calls are convened each year in order to agree 
the final and interim results and dividend. Further virtual 
meetings are arranged, when required. During FY22, the 
Board held six scheduled meetings, and supplemented these 
with eight additional Board calls, many relating to the proposed 
restructuring of the business during 2021. Some members of 
the Executive Team have been invited to the formal meetings 
as attendees. 
The Board is responsible for overall Group strategy, acquisition 
and divestment policy, approval of major capital expenditure 
projects and consideration of significant financing matters. 
It monitors the exposure to key business risks and reviews the 
strategic direction of the business. This includes its code of 
conduct, annual budgets, progress towards achievement of 
those budgets and capital expenditure programmes. 
The Board meeting agenda normally comprises a review 
of management financial statements and operational 
performance, a CEO review of activity, reports from the 
Executive Team, a close review of complaints received by the 
Company, a review of relevant Board sub-committee minutes 
and reports, together with an update on the progress of the 
Group’s other strategic objectives. 
The Chair 
The Chair is mainly responsible for the leadership of the 
Board and ensuring its effectiveness concerning all aspects 
of its role. His duties include ensuring that all Directors 
receive sufficient relevant information on financial, business, 
and corporate issues prior to meetings. The Chair regularly 
reviews the contents of the information pack sent out prior 
to Board meetings in order to ensure that important issues 
are prioritised and each pack is kept to a manageable size. 
The Chair encourages and promotes critical discussion and 
appropriate challenge. He ensures that Board decisions are 
taken on a sound and well-informed basis. 
Chief Executive Officer 
The CEO provides leadership and direction for the Group. 
He chairs the Executive Committee and is Chair of the 
management team of the Shelby Finance Limited subsidiary. 
The CEO makes decisions on matters affecting the operation, 
performance and strategy of the Group’s business. He 
develops and recommends strategy and long-term objectives 
of the Group for approval by the Board and is responsible for 
the day-to-day management of the Group. 
Non-Executive Directors 
As part of their role as members of a unitary Board, Non-
Executive Directors are active at providing constructive 
challenge and helping develop proposals on strategy. They 
have also used their experience from other organisations, 
including public companies, to provide advice to many areas of 
the business. 
From 1 March 2022, Sheryl Lawrence was appointed the 
Senior Independent Director, replacing Sir Nigel Knowles who 
became the Board Chair. The role of the Senior Independent 
Director is to provide a sounding board for the Chair and serve 
as an intermediary for the other Directors and shareholders.
Board structure 
The Board has established a sub-committee structure 
comprising Risk & Compliance, Audit, Nominations & 
Succession, Remuneration & Corporate Social Responsibility, 
and Disclosure Committees. 
The Executive Management Committee, comprising all of the 
Executive Managers and the Executive Directors, reports to  
the Board. 
51
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ANNUAL REPORT & ACCOUNTS 2022 

Corporate Governance Report 
continued
Principle B – Values and culture 
Pages 18 and 19 of the Strategic Report deal with the subject 
of purpose, strategy and culture. 
The Board has been active in promoting the development of 
purpose, strategy and culture within the business. The Board 
uses the Group’s purpose as a yardstick against which to base 
its decisions for the future – how to look after its customers and 
offer affordable credit in our target markets. The Group’s vision 
is set out on page 12.
The Group’s mission is seen as providing relevant credit 
solutions, in-person or digitally, based on understanding 
people’s needs and circumstances.
In a major piece of work, the Group has been reviewing 
its vision, mission and purpose in readiness for the next 
developments within the business.
As part of its customer-centric values, and purpose, the Board 
has a low-risk appetite in all areas of the business except 
for credit risk, which is moderate due to the nature of the 
non-standard sector in which the Group operates. Areas of 
investment are carefully considered and closely monitored, 
with changes made if appropriate. Key investments have been 
made to its customer interface, Dot Dot Loan Management 
System and the customer portals. The Board always carefully 
considers its customers’ interests when reviewing any changes 
to be made to its policies and operations, in accordance with 
the main purposes of the Group.
The Group has an excellent, customer-centric culture: 
•	
The customer satisfaction surveys undertaken by 
independent market research during the year showed: 
•	
Overall customer satisfaction with Morses Club – 97% 
(FY21: 98%). 
•	
Likelihood of the customer recommending Morses Club 
– 95% (FY21: 95%). 
•	
The HCC division’s complaints handling process has been 
independently certified to the ISO 10002:2014 standard. 
•	
In December 2021, the Group extended its customer 
satisfaction surveys to its Digital operation for the first time, 
achieving a satisfaction rate of over 90%.
Further details about customer satisfaction are shown on Page 
14 of the Strategic Report. 
Across the organisation, the four words which were strongly 
used to encapsulate the Group culture were: 
•	
Customer (and customer focus) – as shown by the 
customer satisfaction rates. 
•	
Friendly – all staff strive to be friendly in their approach, 
both to customers and colleagues. 
•	
Fair – Treating Customers Fairly forms the basis of how the 
Company operates. 
•	
Driven – colleagues are determined to achieve success for 
both themselves and the Group. 
As part of its comprehensive response to the Covid-19 
pandemic, the Group undertook surveys of all of its staff in both 
May and October 2020, with a follow-up anonymised survey 
in August 2021, for all employees, with an 86% participation 
level. The key results of this survey are covered on pages 16 to 
17. This was conducted to help us assess employee wellbeing, 
contact with colleagues and teams, as well as their ability to 
continue with home working. 
All the surveys conducted during the pandemic period 
have helped us to ensure that our teams were able to work 
effectively and safely at home, and are in addition to the 
normal annual Health & Safety survey that we complete for 
all staff. In the latest employee survey, 86% of employees said 
that they were coping well with working from home (FY21: 
92%). 
In July 2020, the Board agreed the creation of a cultural 
barometer in order to regularly measure key indicators of the 
Group’s culture. This showed: 
•	
Employee-related measures, including employee 
engagement, conduct, compliance with the SM&CR regime, 
diversity, and reward;
•	
	Agent-related measures, including engagement and 
turnover of individuals; 
•	
	Customer-related measures, including customer 
satisfaction and Good Customer Outcome surveys;
•	
	Vision and values – these are reviewed during the Board’s 
annual strategy meeting.
Following the creation of a cultural barometer in 2020, the 
Board has continued to develop a strategy which ensures that 
we support the ongoing needs of our customers, employees 
and key stakeholders. This was underpinned by major strategic 
initiatives with regard to:
•	
Learning & development to support core management 
training and develop key talent;
•	
	Development of internal communications and engagement 
activity;
•	
	Ongoing employee survey activity to ensure ongoing 
cultural assessment, both as an employer of choice, and to 
ensure our operating model is fit for purpose.
•	
	Introduction of a leadership programme for senior 
management in order to help to embed an operating 
structure and ‘tone from the top’ in a post-Covid-19 world;
•	
	Continued development of a flexible working project 
programme, with the aim of bringing the different parts of 
the business into one organisation. 
In addition to the employee surveys, the Board is due to review 
the results of the cultural barometer in Autumn 2022.
The Board approves the annual schedule for regulatory, 
health & safety and HR training modules that every individual 
is required to undertake on a monthly basis and pass an 
examination at the end of. Incentives have been made 
available to encourage employees to take part in the required 
training during the first seven days in each month.
Financial Statements
Corporate Governance
Strategic Report
52
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Principle C – Effectiveness
Composition of the Board
As at 26 February 2022, the Board comprised five Non-
Executive Directors and two Executive Directors, whose 
biographies are included on pages 46 and 47. 
The Board considered three of the Non-Executive Directors 
(Joanne Lake, Sheryl Lawrence and Michael Yeates) to be 
independent in character and judgement. Sir Nigel Knowles 
was independent at the time of his appointment as Chair. Non-
Executive Directors are not entitled to share options as part 
of their remuneration arrangements and there are no cross-
directorships between Executive and Non-Executive Directors. 
Peter Ward has been appointed by the Group’s major 
shareholder, Hay Wain Group Limited, and so is not considered 
to be independent.
Changes to the Board
On 17 March 2021, Les Easson resigned as Non-Executive 
Director. 
On 1 May 2021, the Company appointed Sheryl Lawrence and 
Michael Yeates as Independent Non-Executive Directors, and 
its COO, Gary Marshall, as an Executive Director. 
On 31 December 2021, Andy Thomson retired from the Board 
after 12 years as an Executive and a Non-Executive Director. 
On 18 February 2022, the CEO Paul Smith left the business  
and was replaced by the then COO, Gary Marshall on  
21 February 2022. 
On 28 February 2022, Stephen Karle stepped down as Chair, 
to be replaced by Sir Nigel Knowles on 1 March 2022. 
On 31 March 2022, Joanne Lake left the Board having served 
her second three-year team as a Non-Executive Director. 
Following these changes, there are two Non-Executive 
Directors (including the Chair) who have served for four to six 
years, and two who have served one to two years. The Board 
is satisfied that it currently contains an appropriate mix of 
skills and experience for a company of the size and market 
capitalisation of Morses Club PLC. 
Further information about the appointment process 
and succession planning is contained in the report of the 
Nominations & Succession Committee on pages 58 to 61. 
Commitment
The Group appreciates the benefits that are brought by a 
Board with a range of business backgrounds. The Board 
is satisfied that each Non-Executive Director has sufficient 
capacity to discharge their responsibilities effectively. This is 
demonstrated by the 97% attendance at Board meetings 
during the year, and also 100% attendance during the previous 
year. Their record of attendance at meetings is shown on page 
56, and they have also demonstrated their commitment by the 
work and advice provided throughout the year. 
Following guidance contained in the 2018 Code, members 
of the Board are now required to give prior approval to the 
Directors for any new appointments. 
Diversity
The Board and its Committees are considered to have an 
appropriate balance of skills, experience, independence and 
knowledge to enable them to discharge their respective duties 
and responsibilities effectively. The Directors have a wide range 
of backgrounds and extensive knowledge of a variety of areas 
of expertise. 
During the year, the Group introduced a diversity & inclusion 
policy to work alongside its existing equal opportunities policy 
with the following aims: 
•	
	To encourage equality, diversity and inclusion in the 
workplace as they are good practice and make business 
sense.
•	
	To create a working environment free of bullying, 
harassment, victimisation and unlawful discrimination, 
promoting dignity and respect for all.
•	
	To endeavour to bring together a range of different styles 
of thinking, perspectives, knowledge, attitudes, abilities and 
information styles to inform our approach to operating our 
organisation.
•	
	To understand that diversity of thought is influenced by 
many factors and to embrace the variety of viewpoints 
within our workforce, which better enables us to service our 
customers.
•	
	To recognise and value the individual differences and 
the contributions of all staff regardless of their personal 
characteristics, demographic or background.
Following the appointment of Sheryl Lawrence in May 2021, 
and until Joanne Lake’s departure on 31 March 2022, two 
members of the Board and 50% of the Independent Non-
Executive Directors were women. One member of the Board is 
classed as ethnically diverse.
Information and support
The Board considers that it is supplied in a timely manner with 
information in a form and of a quality appropriate to enable it 
to discharge its duties. 
Our Non-Executive Directors receive full updates on the 
Group’s progress and relevant issues and bring their 
experience and sound judgement to bear on matters arising. 
Board packs are provided to Directors in a timely fashion. 
Where a decision is required, this is clearly flagged. All Directors 
are encouraged to make a contribution. On the rare occasion 
that a Director has a potential conflict of interest, they remind 
the meeting that this is the case and absent themselves in the 
event of a vote being taken. 
The Company Secretary is available to provide advice and 
services to all Board members and is responsible for ensuring 
Board procedures are followed. All Directors are also able to 
take independent advice to enable them to fulfil their duties  
if necessary.
53
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Effectiveness continued
Board evaluation
Our CEO has been regularly appraised by the Chair. During 
the year, the Chair has undertaken a formal internal Board 
evaluation, and undertaken individual Director appraisals and 
consultations in line with Senior Managers and Certification 
Regime (SM&CR) requirements. Sir Nigel Knowles, the then 
Senior Independent Director, has appraised the then Chair, 
Stephen Karle, after consultation with the other Directors. 
This evaluation concluded that the whole Board is consistently 
engaged, bringing a wide range of perspectives and 
experiences to discussions. The Non-Executive Directors are 
able to reflect on insights gained from their other activities and 
bring valuable input to meetings. 
Following the evaluation, it was agreed to provide additional 
training for the Directors about matters specific to the 
business. Details of the training provided are shown in the 
Development section below. 
Following the Board evaluation, the Nominations & Succession 
Committee agreed that the roles of Chair of the Audit 
Committee and Chair of the Risk & Compliance Committee 
should be separated and the Board acted upon this in its 
appointments of the two new Independent Non-Executive 
Directors in May 2021. 
The Nominations & Succession Committee also agreed that 
having a diverse Board was important and built this aspiration 
into the specification for the executive recruitment firm in its 
search for the two new Independent Non-Executive Directors. 
As a result, there was a diverse range of candidates. 
The Chair has set clear, written objectives for the two new 
Independent Non-Executive Directors. 
Development 
The Board also ensures that Directors receive relevant training 
upon appointment and then subsequently as appropriate. 
During the year, the Directors have received comprehensive 
briefings on the HCC division from its Operations Director; on 
the Digital division from the Chief Operations Officer; on Market 
Abuse Regulations from the Company’s Nomad, Peel Hunt; a 
comprehensive horizon scanning briefing by the Company’s 
lawyers, Eversheds Sutherland; and training on the new board 
portal software installed by the Company in early 2022. 
Re-election of Directors 
Following the recommendation of the July 2018 edition of  
the Code, all Directors submit themselves for re-election, at 
each AGM. 
 
Accountability 
Financial and business reporting 
The Board believes that it is presenting a fair, balanced and 
understandable assessment of the Group’s position and 
prospects. 
Reviews of the performance and financial position of the Group 
are included in the Strategic Report within pages 1 to 43 and 
present a fair, balanced and understandable assessment 
of the Group’s position and prospects. The Directors’ 
responsibilities in respect of the financial statements are 
described on page 82 and those of the auditor on page 93. 
Risk management and internal control 
The Board acknowledges that it is responsible for determining 
the nature and extent of the significant risks it is willing to take 
in achieving its strategic objectives. The Group maintains sound 
risk management and internal control systems, and these are 
described in the Risk Management section on pages 24 to 29. 
Such systems are designed to manage rather than eliminate 
the risk of failure to achieve the Group’s overall business 
objectives and can only provide reasonable, not absolute, 
assurance against material misstatement or loss. 
The Group’s internal control systems, including financial, 
operational and compliance controls, are reviewed regularly 
with the aim of continuous improvement. Whilst the Board 
acknowledges its overall responsibility for internal control, it 
believes strongly that senior management within the Group’s 
operating businesses should also contribute in a substantial 
way and this has been built into the process. 
The Board discharges its duties in this area through: 
•	
the review of financial performance including budgets, key 
performance indicators, and forecasts on a monthly basis; 
•	
the receipt of regular reports that provide an assessment of 
key risks and controls and how effectively they are working; 
•	
scheduling annual Board reviews of strategy including 
reviews of the material risks and uncertainties facing the 
business; 
•	
the receipt of reports from senior management on the risk 
and control culture within the Group; 
•	
the presence of a clear organisational structure with 
defined hierarchy and clear delegation of authority; and 
•	
ensuring that there are documented policies and 
procedures in place. 
Through the Risk & Compliance Committee, the Board reviews 
the risk management framework and the key risks facing the 
business. The Finance Department is responsible for preparing 
the Group financial statements and ensuring that accounting 
policies are in accordance with International Financial 
Reporting Standards. 
All financial information published by the Group is subject to 
the approval of the Audit Committee. 
Corporate Governance Report 
continued
Financial Statements
Corporate Governance
Strategic Report
54
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

The Board, with advice from both of the Audit and the Risk & 
Compliance Committees, is satisfied that a system of internal 
controls and risk management is in place that enables the 
Group to identify, manage and evaluate risks, including 
emerging risks. The report of the Audit Committee on pages 
62 to 68 demonstrates how the Board has established formal 
and transparent arrangements for considering how it should 
apply the corporate reporting and risk management and 
internal control principles, and for maintaining an appropriate 
relationship with the Group’s auditor. The Audit Committee is 
also responsible for the Group’s Internal Audit function. 
These processes have been in place for the year under review 
and up to the date of approval of the report and financial 
statements. They are regularly reviewed by the Board and 
accord with the guidance in the 2018 Code. 
The Board intends to keep its risk control procedures under 
constant review, particularly as regards the need to embed 
internal control and risk management procedures further 
into the operations of the business and to deal with areas of 
improvement that come to the attention of management and 
the Board. 
Audit Committee and its auditors 
The Board is required to establish formal and transparent 
arrangements for considering how they should apply the 
corporate reporting, risk management and internal control 
principles, and for maintaining an appropriate relationship 
with the Company’s auditor. The Audit Committee is also 
responsible for looking after the Group’s Internal Audit function. 
Principle D – Stakeholder engagement 
The s172 statement in the Strategic Report on page 31 
provides a summary of the Group’s engagement with its 
various stakeholders. 
In this part of the Annual Report, we believe it is important 
to demonstrate still further the excellent engagement the 
Company has with its shareholders. 
Dialogue with shareholders 
The Board is responsible for ensuring that there is a dialogue 
with shareholders based on the mutual understanding of 
objectives. The Board as a whole has responsibility for ensuring 
that a satisfactory dialogue with shareholders takes place. 
The Group communicates with institutional and private 
investors and responds promptly to all queries received 
verbally or in writing. All shareholders have at least 20 working 
days’ notice of the AGM at which all Directors, including 
Committee Chairs, are usually present and available to 
answer questions. In 2021, the AGM was held virtually, with 
shareholders encouraged to ask questions prior to the meeting. 
The Board is aware of the importance of maintaining close 
relations with investors and analysts. Twice-yearly roadshows 
are usually conducted by the CEO and CFO when the 
performance and future strategy of the Group are discussed 
with larger shareholders. During FY22, updates were provided 
in a virtual environment to analysts and shareholders. 
These meetings usually cover any matters arising from the 
analyst presentations, the market in which the Group is 
operating, its dealings with the Regulator, together with the 
Group’s financial performance and future strategy. Queries 
from shareholders are dealt with by the CFO. In addition, 
members of the Board receive regular feedback from major 
shareholders and discuss this at Board meetings. The Chair 
and the Senior Independent Director are also named and 
make themselves available, should an investor wish to express 
any views to them.
Principle E – Workforce engagement 
The Strategic Report on pages 18 and 19 provides a summary 
of the Company’s work on developing its purpose and values 
and ensuring that workforce policies and procedures are 
consistent with these. 
Since its IPO in May 2016, the Group’s objective has been clear 
and resolute – to ensure that as many Morses Club employees 
hold shares as possible. 
Share awards were granted to all eligible staff in 2017, 2018, 
2019 and again in 2021. Following the employee share award 
in December 2021, 100% of the HCC division’s employees who 
were employed prior to October 2020 hold shares under the 
Share Incentive Plan. The Group has also continued to provide 
Perkbox to all of its employees which provides access to 
hundreds of perks and discounts. 
Under the 2018 Corporate Governance Code, the Board 
is expected to engage with the workforce using one or a 
combination of the following three methods: 
•	
A Director appointed from the workforce. 
•	
A formal workforce advisory panel. 
•	
A designated Non-Executive Director. 
Les Easson was the Group’s Designated Director responsible 
for employee engagement, with effect from January 2020 
until he resigned on 17 March 2021. He was replaced as the 
Designated Director by Sheryl Lawrence following a Board 
meeting on 22 October 2021. During the period between 
17 March 2021 and 22 October 2021, the Company did not 
comply with Provision 5 of the Code. 
Information about the Group is provided through a number 
of methods, including regular business updates on the 
Group’s intranet, videos made available to all employees, and 
presentations by the CEO. 
The Group has a very robust whistle-blowing policy and 
procedures. The Group has consistently highlighted to its staff 
the FCA’s whistle-blowing hotline as well as providing both 
an internal contact telephone number and email address, 
together with the contact details of one of our Independent 
Non-Executive Directors. There were no whistle-blowing events 
during the year, or during the previous year. 
55
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Board Committees and Directors’ attendance at meetings
Board Committees 
The terms of reference of all of the Board Committees are available on the Group’s website at www.morsesclubplc.com. 
Copies of the service contracts and letters of agreement of each of the Directors are available at the Group’s registered office 
during business hours and are available for inspection at each AGM at which shareholders can be present for at least 15 minutes 
prior to and until the conclusion of the AGM. 
During the year, the Board has continued its policy that all Non-Executive Directors are invited to attend meetings of the 
Audit, Risk & Compliance, Nominations & Succession and Disclosure Committees in order to maintain a full appreciation and 
understanding of the Group. 
Details of attendance at scheduled Board and Committee meetings during the year are shown below:
 Committees
Board
Risk & 
Compliance 
Committee
Audit Committee
Remuneration & 
Corporate Social 
Responsibility 
Committee
Nominations 
& Succession 
Committee
Disclosure 
Committee
Meetings
6
4
4
4
3
2
Stephen Karle
Chairman
6
–
–
4
3
2
Paul Smith
Chief Executive Officer to 
18/2/2022
6
–
–
–
–
1/1
Graeme Campbell
Chief Financial Officer
6
–
–
–
–
2
Sir Nigel Knowles
Senior Independent 
Director
5
4
3
4
3
2
Joanne Lake
Non-Executive Director
6
4
4
4
3
2
Peter Ward
Non-Executive Director
6
–
–
–
3
2
Andy Thomson
Non-Executive Director  
to 31/12/2021 
5/5
–
–
–
–
0/0
Sheryl Lawrence
Non-Executive Director 
from 1/5/21
4/4
3/3
4
–
2/3
2
Michael Yeates 
Non-Executive Director 
from 1/5/21
4/4
3/3
4
–
2/3
2
Gary Marshall 
COO from 1/5/21, CEO 
from 21/2/22 
4/4
–
–
–
–
2
Les Easson 
Non-Executive Director  
to 17/3/2021 
0/1
–
–
–
–
0/0
The Board held several additional ad hoc meetings during the year, primarily relating to (i) the attempt to restructure the Group in 
the second half of 2021; and (ii) the approval of the final and interim accounts. 
Corporate Governance Report 
continued
Financial Statements
Corporate Governance
Strategic Report
56
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Membership of Committees 
Membership of the Committees during the period to 26 February 2022 is shown below: 
C = Chair	
M = Member	
UA = Upon appointment 
Position
Risk & 
Compliance 
Committee
Audit  
Committee
Remuneration & 
Corporate Social 
Responsibility 
Committee
Nominations 
& Succession 
Committee
Disclosure 
Committee
Considered 
 Independent
Stephen Karle
Non-Executive Chairman
–
–
M
C
C
UA
Paul Smith
Chief Executive Officer to 
18/2/2022 
–
–
–
–
M
X
Graeme Campbell
Chief Financial Officer
–
–
–
–
M
X
Sir Nigel Knowles
Senior Independent Director
M
M
M
M
M
Y
Joanne Lake
Non-Executive Director
M
M
C
M
M
Y
Peter Ward
Non-Executive Director
–
–
–
M
M
X
Andy Thomson
Non-Executive Director to 
31/12/2021 
–
–
–
–
M
X
Sheryl Lawrence
Non-Executive Director from 
1/5/2021
M
C
M
M
M
Y
Michael Yeates 
Non-Executive Director from 
1/5/2021
C
M
–
M
M
Y
Gary Marshall 
COO from 1/5/21, CEO from 
21/2/2022 
–
–
–
–
M
X
Les Easson 
Non-Executive Director to 
17/3/2021 
–
–
–
–
M
X
Joanne Lake was Interim Chair of the Audit Committee and of the Risk & Compliance Committee from 13 February 2021 to  
3 September 2021 and 26 July 2021 respectively. 
On 1 May 2021, the Company appointed Sheryl Lawrence and Michael Yeates as Independent Non-Executive Directors. On  
3 September 2021, Sheryl Lawrence was appointed Chair of the Audit Committee, and on 26 July 2021, Michael Yeates was 
appointed Chair of the Risk & Compliance Committee. 
On 1 May 2021, Gary Marshall, the COO, was appointed an Executive Director. He was subsequently appointed CEO on  
21 February 2022. 
57
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Nominations & Succession Committee Report
WHAT DOES THE COMMITTEE DO? 
1.	
Ensures that the Board has a formal and 
transparent appointments procedure 
and that the balance of Directors on the 
Board remains appropriate as the Group 
develops in order to ensure that the 
business can compete effectively in the 
marketplace. 
2.	 Identifies and nominates candidates to fill 
Board vacancies as and when they arise. 
3.	 Evaluates the balance of skills, knowledge, 
experience and diversity of the Board in 
order to ensure an optimum mix. 
4.	 Considers the succession planning 
for Directors, Executives and senior 
managers to ensure that any succession 
is managed smoothly. 
The Committee comprises all of the Group’s 
Independent Non-Executive Directors, the 
Board Chair, and Peter Ward. The Committee 
and its sub-committee held six meetings 
during the year. 
The Committee’s terms of reference are 
available on the Group’s website.
Dear Shareholder,
I am pleased to present the 
report of the Nominations  
& Succession Committee 
which covers the year ended 
26 February 2022. 
The report provides insight into the 
composition of the Committee and the 
work that it undertakes. 
We continue to assist the Board in the 
assessment of the appropriate skills 
and in developing succession plans to 
ensure we continue to deliver against 
our strategy. 
COMMITTEE MEMBERS 
Stephen Karle (Chair to 28 February 2022) 
Sir Nigel Knowles (Chair from 1 March 2022) 
Joanne Lake (until 31 March 2022) 
Peter Ward 
Sheryl Lawrence (from 1 May 2021) 
Michael Yeates (from 1 May 2021) 
Financial Statements
Corporate Governance
Strategic Report
58
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Diversity 
The Group recognises the importance of diversity both at 
Board level and throughout the whole organisation. 
The Board remains committed to increasing diversity. 
Consequently, diversity is taken into account during each 
recruitment and appointment process, working to attract 
outstanding candidates with diverse backgrounds, skills, ideas 
and culture. 
As part of its commitment to diversity, in April 2022 the Group 
agreed a new Diversity & Inclusion Policy. 
The policy aims to ensure that recruitment and selection 
processes minimise the potential for unconscious bias, and we 
will make opportunities for training, development and progress 
available to all staff, who will be helped and encouraged to 
develop their full potential, so their talents and resources can 
be fully utilised to maximise the efficiency of the organisation. 
Our decisions concerning staff will be based on merit (apart 
from any necessary and limited exemptions and exceptions 
allowed under the Equality Act) and we will review employment 
practices and procedures when necessary to ensure fairness. 
We will conduct surveys to measure and understand employee 
engagement and use this information to inform our approach 
to implementing initiatives or changes within our organisation. 
The Group is currently finalising targets and/or actions in this 
area that are relevant to the business which are due to be 
reviewed by the Board during 2022. 
The Group already has an established policy of promoting 
equal opportunities in employment, ensuring that 
discrimination does not take place, and everyone receives 
equal treatment regardless of age, disability, gender 
reassignment, marital or civil partner status, pregnancy or 
maternity, race, colour, nationality, ethnic or national origin, 
religion or belief, sex or sexual orientation. 
Following the appointment of Sheryl Lawrence in May 2021, 
and until Joanne Lake’s departure on 31 March 2022, two 
members of the Board and 50% of the Independent Non-
Executive Directors were women. One member of the Board is 
classed as ethnically diverse. 
As at 26 February 2022, the Executive Management Team 
and Company Secretary comprised ten men and two women. 
Their direct reports consisted of 29 men and 14 women. 
 
Activities during the year 
During the year, the Committee has: 
•	
undertaken an exercise to look at Executive succession 
planning; 
•	
reviewed the composition of the Board and its sub-
committees; 
•	
undertaken an annual internal evaluation process for both 
the Chairman and the Board as a whole; 
•	
concluded that the Board works effectively, both as a 
group and in its individual committees, bringing a wealth of 
relevant experience to the Group; and 
•	
made a number of recommendations in relation to 
appointments to the Board, namely: 
•	
appointment of the COO; 
•	
appointment of two Independent Non-Executive 
Directors; 
•	
appointment of COO to the position of CEO. 
Internal Board evaluation 
In terms of the evaluation of Board members, the Board 
succession planning process is set out in a clear, written policy 
which ensures consistency and rigour. It is underpinned by 
a Board profile matrix, in which the skills, competences and 
diversity needs of the Board are mapped against current 
composition. The matrix helps the Board focus its search and 
write relevant role descriptions that are Senior Managers and 
Certification Regime (SM&CR) compliant for the selection of 
any new Non-Executive Directors. 
A further measure involves annual effectiveness reviews of 
individual Non-Executive Directors, led by the Chairman, but 
with the Chairman being assessed by the Senior Independent 
Director with input from all Directors. The Committee has given 
consideration to a future evaluation by external consultants, to 
assist the Board in understanding its collective effectiveness 
and to help inform Non-Executive Directors of their strategic 
relevance to the Group. This is not expected to be undertaken 
within the next 12 months. 
Where changes to Board composition are considered 
necessary, the Committee defines the Board’s needs, identifies 
the talent required, and engages independent, reputable 
search consultants and/or key advisers to assist in the search 
for high-calibre candidates, submitting its recommendations to 
the full Board for consideration. 
59
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Nominations & Succession Committee Report 
continued
Following the internal evaluation, the Committee concluded 
that: 
•	
the Board remains focused on outcomes – for 
customers, investors, employees, self-employed agents 
and stakeholders. This can be demonstrated by the 
management information requested by and produced to 
the Board at each Board meeting; 
•	
the Board consistently considers the relevance of its 
capabilities to meet the challenges ahead. This is debated 
at the Nominations & Succession Committee; 
•	
the culture at the Board table encourages wide, deep and 
relevant participation; 
•	
the Board is consistently engaged. All Non-Executive 
Directors add value in maximising the leverage and quality 
of their third-party relationships; 
•	
Board colleagues bring a wide range of perspectives to 
the Board table. Non-Executive Directors reflect on insights 
gained from their other activities and bring valuable input 
to meetings; 
•	
additional training should be provided to the Directors on 
topics specifically related to the Group’s activities. During 
the year, the Directors have received comprehensive 
briefings on the HCC division from its Operations Director; 
on the Digital division from the Chief Operating Officer; on 
Market Abuse Regulations from the Company’s Nomad, 
Peel Hunt; a comprehensive horizon scanning briefing 
by the Company’s lawyers, Eversheds Sutherland; and 
training on the new Board portal software installed by the 
Company in early 2022. 
•	
the Board agenda and management information are 
continually reviewed to ensure that concise and relevant 
information is made available at an appropriate time. 
As a result of the Board evaluation, the Committee has 
concluded that the Board works effectively as a group in its 
current form, although this will remain under annual review. 
Changes to the Board during the year 
There have been a number of changes to the Board during  
the year. 
Recruitment of new Non-Executive Directors 
In February 2021, the Committee commenced an exercise  
to recruit two new Independent Non-Executive Directors.  
The Company again engaged the independent executive 
search and selection specialists, Argent Services Limited,  
for both appointments. 
Prospective candidates were interviewed by the Chairman and 
were provided with a briefing about the Group by the CEO. 
Following this process, the Committee met and subsequently 
recommended the appointment of two new Independent 
Non-Executive Directors, Sheryl Lawrence and Michael Yeates. 
Both bring significant experience in the financial services sector. 
Sheryl Lawrence was appointed Chair of the Audit Committee 
and Michael Yeates became Chair of the Risk & Compliance 
Committee. Their biographies are included on page 47. 
Appointment of additional Executive Director 
The Committee also recommended the appointment of Gary 
Marshall, the Chief Operating Officer, to the Board effective  
1 May 2021. Since he joined the Group in July 2019, Gary had 
been responsible for successfully leading the integration and 
development of the Digital business, Shelby Finance. Gary 
had also taken on overall responsibility for the Group’s IT and 
Change functions. Following the departure of Paul Smith from 
the business in February 2022, the Committee recommended 
that Gary be appointed the Group’s Chief Executive Officer. His 
biography is included on page 46. 
Leavers 
Les Easson 
On 17 March 2021, Les Easson resigned as a Non-Executive 
Director. Les had been appointed a Non-Executive Director 
upon his retirement as Operations Director following 36 
years at the Company. The support he has given to ensure 
his replacement had a smooth transition into the Operations 
Director role has been extremely valuable and Les felt 
that after 18 months, it was the right time to relinquish his 
mentoring role. 
Andy Thomson 
Andy Thomson, who had resumed his position as Non-
Executive Director on 1 January 2021, following the 
appointment of Graeme Campbell as CFO, retired on  
31 December 2021. 
Paul Smith 
Paul Smith, the CEO, left the Company on 18 February 2022. 
Financial Statements
Corporate Governance
Strategic Report
60
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Changes to the Board after the end of  
the year 
Stephen Karle 
On 28 February 2022, Stephen Karle retired as Chair of  
the Board. Stephen had been Chair since January 2015 
and had led the business through its IPO and supported its 
transition from a pure home collected credit provider to its 
current position as a market-leading provider of non-standard 
credit. Stephen’s decision to retire had been announced in 
December 2021. 
Sir Nigel Knowles 
On 1 March 2022, Sir Nigel Knowles replaced Stephen Karle as 
Board Chair. Sir Nigel has been a member of the Board and 
Senior Independent Director since May 2016. 
Joanne Lake 
Following the completion of her second three-year term of 
office as a Non-Executive Director on the Board, Joanne Lake 
stepped down from the Board on 31 March 2022. 
Corporate Governance Code 
The Committee is aware that following these changes, 
the Group does not comply with Provision 11 of the 2018 
Corporate Governance Code which relates to the proportion 
of Non-Executive Directors whom the Board considers to 
be independent. The Company has two Independent Non-
Executive Directors, which the Board believes is an appropriate 
number for its current size and market capitalisation. 
Succession planning 
The Company has developed a policy for both Board and 
Executive succession planning that sets out a process by which 
the Nominations & Succession Committee plans ahead for the 
replacement of Executive and Non-Executive Board members 
and the Chair, either because of a vacancy or a possible future 
vacancy. This process looks at the medium term and longer 
term, together with potential contingencies. 
The plan has been developed to ensure: 
•	
continuity in key roles; 
•	
sustainability of the Company’s performance; 
•	
high standards of corporate governance; and 
•	
appropriate investor dialogue. 
It addresses the issues of competence, integrity, transparency, 
diversity and independence by seeking to define the shape of 
the Board and Executive teams by assessing on an ongoing 
basis: 
•	
the required levels of knowledge, skills, experience and 
specific expertise; 
•	
the proportion of the Board that should be composed of 
Independent Non-Executive Directors; 
•	
the issue of diversity in the widest sense of the word, 
especially gender diversity; 
•	
the effectiveness of Board refreshment through the 
periodic appointment of new members and the scheduled 
retirement of incumbent Directors, the primary aim being to 
align skill sets with the Group’s evolving strategic direction; 
and 
•	
whether effective risk management is in place to minimise 
the vulnerability to narrow ‘group thinking’. 
Board service is strictly contingent on individual Director 
performance and annual re-election, founded upon 
satisfactory evaluations of his or her contribution to the Board. 
The position will be kept under close review by the Nominations 
& Succession Committee alongside the delivery of the Group’s 
strategy. 
Approval 
On behalf of the Nominations & Succession Committee.
Sir Nigel Knowles 
Chair 
25 August 2022
61
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ANNUAL REPORT & ACCOUNTS 2022 

Audit Committee 
Report
WHAT DOES THE COMMITTEE DO? 
The key objective of the Committee is to 
provide assurance to the Board as to the 
effectiveness of the Company’s internal 
controls and the integrity of its financial 
records and externally published results.
The Committee monitors and reviews the 
Group’s financial reporting from information 
provided by management and the auditor. 
The Committee reports to the Board on the 
Group’s full and half-year results, having 
examined the accounting policies on which 
they are based and ensured compliance with 
relevant accounting standards.
The Committee’s terms of reference are 
available on the Group’s website.
The Committee held four scheduled meetings 
during the year, in alignment with its terms 
of reference. It also held a special meeting to 
review and approve a proposed new model 
for IFRS 9 impairment provisions for the Digital 
division.
The Committee acknowledges and embraces 
its role in protecting the interests of 
shareholders and is committed to monitoring 
the integrity of the Group’s reporting.
The Committee performed reviews of 
the full-year, interim and trading update 
announcements, and the Annual Report and 
Accounts and half-yearly financial statements.
Dear Shareholder,
As the Chair of the Audit  
Committee, I am pleased  
to present the Committee’s  
report for the year ended  
26 February 2022.
The report provides insight into the  
composition of the Committee and 
the work that it undertakes.
In essence, we ensure the integrity of  
the financial reporting, the robustness  
of internal operational and financial  
controls and the independence of the  
external auditor. Consequently we can 
assert that in the financial year 
controls have operated effectively.
COMMITTEE MEMBERS 
Sheryl Lawrence  
(member from 1 May 2021, Chair from 3 September 2021)
Joanne Lake  
(Interim Chair from 13 February 2021 to 2 September 2021).  
Left 31 March 2022.
Michael Yeates  
(from 1 May 2021)
Sir Nigel Knowles  
until he was appointed Board Chair on 1 March 2022
Financial Statements
Corporate Governance
Strategic Report
62
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Composition and governance
As a Chartered Accountant, the Board considers that Sheryl 
Lawrence has recent and relevant financial experience. All of 
the independent Non-Executive Directors are members of this 
Committee, and this has been the practice since the Group’s 
IPO in May 2016. 
The other Directors are also invited to attend meetings, as are 
senior representatives of the external auditor, together with 
appropriate members of the Executive team, in order to ensure 
that all relevant information is available to the Committee.
The Committee meets with the external auditor without 
the presence of Executive Management twice each year to 
discuss matters relating to its remit and any issues relating 
to the audit. The Committee has also met each of the Risk & 
Compliance Director and the Head of Internal Audit individually 
on an annual basis without the presence of other Executive 
Management.
The Committee has direct and unrestricted access to both 
internal and external audit functions. As the Chair, I also have 
regular contact with the external auditor, the Chief Financial 
Officer, the Risk & Compliance Director, and the Internal Audit 
function outside the formal meetings to ensure that any areas 
for discussion are dealt with in a timely manner.
How the Committee discharged its responsibilities
The Audit Committee held four scheduled meetings during 
the year in alignment with its terms of reference and with the 
Group’s financial reporting timetable. It also held a special 
meeting to review and approve a proposed new model for 
IFRS 9 impairment provisions for the Digital division.
A self-assessment internal review of the performance of the 
Committee concluded that it had discharged its responsibilities 
during the year. This was achieved by (i) the Committee 
members performing an evaluation of the way that the 
Committee operates, and (ii) comparing the Committee’s 
terms of reference with the Committee’s actions and 
considerations during the year. The Committee was satisfied 
that it had discharged its responsibilities effectively discharged 
its responsibilities effectively.
Significant areas of judgement 
The external auditor has scoped the audit appropriately and 
subjected significant areas of judgement to robust challenge.
The Committee considers there to be five significant areas of 
judgement, and these are detailed below.
1.	 Loan loss provisioning
IFRS 9 requires management to record impairment provisions 
based on the stage of credit impairment. The recording  
of a provision requires management to make complex 
judgements/estimates. 
The Committee regularly challenges the appropriateness 
of management’s judgements, estimates and assumptions 
underlying the impairment provision calculations and 
concluded that the provisions held against the loan book  
are reasonable.
For HCC, management has adopted an approach to IFRS 9 
impairment modelling, based on discounting expected future 
cash flows whereby the probability of default and loss given 
default are assessed as a single combined measure.
The key judgement/estimate is around the estimation of 
expected future cash flows used to determine the provision.
The management approach to HCC loan loss provisioning was 
reviewed with the Committee and the external auditors at one 
of the Committee’s scheduled meetings. This approach of using 
cash collection curves for the previous five individual year-end 
snapshots of data with three years of forward-looking cash 
flows (in this case, 2016-2020 – see below) has remained 
consistent with the previous year. The Committee believes that 
continuing to use a weighting of the individual cash curves to 
give more prominence to the most recent cohort to be most 
appropriate in estimating the loan loss provision required.
In this way, the cash collection curves have been weighted 
to give prominence to the 2020 cohort using a weighting of 
60%, with a 10% weighting for each of the other four cohorts. 
Management and the Committee feel that weighting the 
selection of data towards the 2020 data, which reflects the 
most recent performance of the loan book, will give a closer fit 
to the performance of the end of year loan book than the other 
years in the data set. This approach is consistent with that 
taken at the last year-end and the interim half-year-end. 
Sheryl Lawrence is a Chartered Accountant with 
extensive experience within the financial services sector, 
whilst Sir Nigel Knowles is the CEO of global legal 
business DWF plc, having been a Managing Partner 
at the global law firm DLA Piper for nearly 20 years. 
In addition, Michael Yeates has had over 40 years of 
experience in the financial services industry.
63
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Audit Committee Report 
continued
In the financial year the mix of customers paying monthly and 
fortnightly rather than weekly has increased, resulting in the 
existing weekly impairment model requiring adjustment to 
ensure monthly and fortnightly payers are not deemed to have 
missed payments not yet expected to have been received. 
That adjustment resulted in a £1.0m reduction to impairment 
at the year-end.
After discussion with management and the external auditor, 
the Committee considered the 2016-2020 cash curves to be 
appropriate for the purposes of determining the base level of 
impairment provision required at year end.
•	
The adoption of multiple cohorts to construct the cash 
curves remained consistent with the Company’s IFRS 
9 policy. The impact of transitioning from 2015-2019 
weighted curves used in FY21 to the 2016-2020 weighted 
curves used in FY22 was a £0.3m reduction in impairment. 
•	
FY22 actual cash collections were within c.5% of those 
forecast in the FY21 year-end provision.
IFRS 9 requires that the impairment assessment considers 
reasonable and supportable information, including forward-
looking information, that is relevant for the financial instrument 
being assessed.
In order to protect the performance of the business against 
any macro-economic factors that would have an impact on 
customers’ abilities to repay (such as rising household bills, 
increases to energy-related costs and the impacts of inflation) 
an affordability buffer is built into Income and Expenditure 
affordability assessments. Whilst economic data is monitored, 
the collection performance experienced through the Covid-19 
pandemic (which showed improvement immediately post 
first lockdown and no drop off in performance in subsequent 
lockdowns) is evidence that HCC is not impacted by traditional 
macro-economic events, partly because of the affordability 
buffers, and partly because these factors do not impact HCC 
customers. This view has been widely held among peers and 
sector analysts over time and leads management to the 
conclusion that no specific macro-economic overlay is required.
In H2 FY22 there was further evidence of the immunity of 
collections performance to macro-economic factors. The 
ending of furlough, changes to Universal Credit, and increases 
to energy prices experienced in the financial year did not cause 
collections performance to deteriorate. As such, whilst cost of 
living increases are monitored, and will be considered when 
stress-testing forecasts, management does not believe there 
will be an adverse impact on collections performance post 
year-end directly due to increased inflation.
The HCC credit policies incorporate the ONS expenditure 
model and has been updated for recent increases to inflation
and the cost of energy. Based on the review described above 
as well as considering the economic factors impacting the loan 
receivables balance, such as inflation, interest rates, and the 
ending of furlough, the Committee concluded that the 
underlying provisions held against the HCC loan book  
are reasonable.
For Digital, management has updated its Digital IFRS 9 
impairment methodology and modelling approach since the 
prior year. A relatively simplistic approach has previously been 
applied due to the Digital business being in its infancy and 
growth being lower than anticipated. The new methodology 
is more complex to better estimate the provisions required 
under IFRS 9.
Management’s approach has been to determine c.800 different 
customer behavioural data points or nodes which are based 
on a combination of predictive variables including loan term, 
number of previous loans taken by a customer, past due status 
and credit scoring. Each customer is assigned a particular 
node and based on this assignment management then applies 
probability of default (PD), exposure at default (EAD), loss given 
default (LGD) and time to default assumptions in order to 
determine individual impairment provisions. The key judgement 
is around the determination of the estimates of the PD, EAD 
and LGD for each node which then drives the calculation of 
the estimates of the PD, EAD and LGD for each node. As the 
period which was sampled included the Covid-19 pandemic and 
associated forbearance payment breaks, the data available 
for use was limited. Data from agreements issued in the period 
November 2020 to October 2021 has been used for PD and 
EAD purposes to allow sufficient time for an account to reach 
default and May 2020 to January 2021 for LGD purposes to 
allow sufficient time for post-default recoveries.
Management and the Committee feel that the data periods 
used reflect the most recent performance of the loan book  
and will give a closer fit to the performance of the end of year 
loan book.
The management approach to Digital loan loss provisioning 
was reviewed with the Committee and the external auditors 
at one of the Committee’s scheduled meetings. After 
discussion with management and the external auditor, the 
Committee considered the updated methodology to be 
appropriate for the purposes of determining the base level 
of impairment provision required at year end. The impact of 
adopting the updated methodology model in FY22 was a 
reduction of £1.4m. Given the short-term nature of most of 
the Digital lending, and that affordability buffers are put in 
place at loan inception, management does not believe there 
will be an adverse impact on collections performance post 
year-end directly due to increased inflation.
Based on the review described above, the Committee 
concluded that the underlying provisions held against the 
Digital loan book are reasonable.
2.	 Revenue recognition
IFRS 9 requires management to recognise interest using the 
effective interest rate (EIR) method based on the stage of 
credit impairment.
For HCC, in order to arrive at the average expected life for 
each product type, management have taken an average 
of the expected lives of loans within the December 2016–
2020 cohorts. These expected lives were adjusted where 
appropriate to reflect the actuals.  
Financial Statements
Corporate Governance
Strategic Report
64
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

As with prior year, in FY22, the cohorts have been weighted to 
give prominence to the 2020 cohort using a weighting of 60%, 
with a 10% weighting for each of the other four cohorts. This 
approach is deemed reasonable given the data sets align with 
those used to construct the cash collection curves for loan loss 
provisioning purposes (as described above), thereby resulting 
in consistency across management’s IFRS 9 modelling 
methodology. The Committee has reviewed the expected life 
assumptions and management’s judgement paper.
The management treatment of revenue recognition was 
reviewed with management and the external auditors at one 
of the Committee’s scheduled meetings. This treatment has 
remained consistent with the previous year. The Committee 
has also challenged the expected life of products by reference 
to both historical and forecast data and comparability with 
the contractual life under IFRS 9. As a result of this review, the 
Committee has concluded that the Group’s treatment of this  
is reasonable. 
For Digital, the modelling approach for revenue recognition 
has been updated alongside the impairment methodology. 
The EIR for each agreement is used for the purposes of 
revenue recognition rather than an expected average life for 
each product. The effective interest rate is calculated using 
estimated cash flows with revenue recognised on the gross 
receivable when accounts are in IFRS 9 stages 1 and 2 and on 
the net receivable for accounts in stage 3.
For both HCC and Digital brokers are used to generate new 
business leads. As with revenue, and in line with IFRS 9, broker 
commission costs are recognised on an EIR basis in the income 
statement spread over the term of the related customer 
contract. As this is a cost of generating revenue, revenue is 
stated net of this cost.
3.	 Goodwill impairment
A third significant area of judgement/estimation is that of 
goodwill impairment. 
Management is required by accounting standards to 
perform an annual impairment review for goodwill balances. 
Assessment of impairment involves estimating the fair value 
less costs to sell and value in use of certain intangible assets at 
each reporting period. This requires an assessment of whether 
there are any impairment triggers which, given the nature of 
the assets, focuses on performance and cash flows.
The Committee has reviewed the forecast cash flows in 
the goodwill impairment model. These are based on the 
expectations within the current business plan, which are the key 
assumptions in driving the first five years of projections. Longer-
terms growth rates, which are at a lower level, reflect a level of 
anticipated maturity, which together with the discount rate used, 
are also key factors underpinning the forecast in perpetuity. 
The Company used a pre-tax weighted average cost of capital 
(WACC) of 13.36% in order to discount future cash flows. If the 
WACC were to decrease by 1% to 12.36% the headroom over the 
discounted future cash flows would increase by £11.7m. 
In considering the future projected cash flows, the Committee 
reviewed the current performance of the business and 
through the use of sensitised scenarios, including a ‘Collect-
Out’ scenario as recommended by the Regulator, is satisfied 
that performance is at a sufficient level and that there was no 
requirement to impair goodwill.
In reviewing impairment indicators, the Committee considered 
a number of factors. The key area under consideration was the 
market capitalisation of the entity compared to the carrying 
value of its net assets. At the year end the market capitalisation 
of £17.9m was below net assets of £32.2m. It is the view of 
management that the share price is artificially low as a result of 
uncertainty surrounding the complaints liability and availability 
of funding and that once resolved the share price will recover. 
The share price would need to increase to 23p to have parity 
with the balance sheet valuation. Whilst the Committee 
considered this as a potential impairment indicator, it has 
concluded that this is insufficient evidence of a permanent 
impairment of balance sheet value, and that it is unconnected 
to goodwill. It is the expectation of management that the share 
price will recover and as such no impairment to goodwill has 
been recognised.
4.	 Complaints
IAS 37 (Provisions, Contingent Liabilities and Contingent 
Assets) describes the accounting for provisions as the present 
value of the best estimate of the expenditure required to settle 
a present obligation. 
During FY21 Morses Group PLC adopted a policy to  
recognise at the balance sheet date the cost to settle  
existing complaints received by customers. In FY22 this  
policy continues to be adopted.
CMCs prompted a review of complaints received, identifying 
any key root causes. A review was undertaken with an external 
technical specialist (Huntswood CTC Limited) outlining 
proposals for any redress methodology which could be 
considered as part of any potential Scheme of Arrangement. 
IAS 37 requires recognition of a liability when there is a present 
obligation. The original lending to the customer gives rise to the 
present obligating event, and not the raising of the complaint. 
Review of root cause indicated that outflow is probable as a 
discernible trend and becomes identifiable from FOS decisions. 
The proposals for any redress methodology under a potential 
Scheme, with the input from the external technical specialist, 
sets out a total potential gross quantum liability and provides 
management with a best estimate of likely take-up rates from 
customers from similar types of Schemes, giving an ability 
to measure.
The Directors accept there is a liability in relation to customer 
redress claims for unaffordable lending against the Company 
at the balance sheet date, however there is significant 
uncertainty of the total liability which will be paid. This is due 
to the methodology for assessing the population of claims is 
yet to be agreed, and the level of subsequent customers who 
may claim against that methodology not yet being known. 
65
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Audit Committee Report 
continued
Using a risk-free discount rate of 2.1% a discounted liability of 
£39.1m has been calculated and recognised in these financial 
statements. Management and the Committee believe this is 
the best estimate of the present value of the liability payable 
to customers in relation to unaffordable lending complaints. 
An amount totalling £3.5m has been written off the gross 
loan book in relation to claims expected to be received where 
customers have an existing loan. The total exceptional charge 
to the Income Statement is £42.6m. 
5.	 Going concern and business plan
In assessing going concern, the Directors and the Committee 
have reviewed the latest forecasts of the business and satisfied 
themselves of the ongoing viability of the business. 
This assessment is subject to two factors. Firstly, the 
agreement of a Scheme of Arrangement on a timely basis 
with the FCA to facilitate an orderly settlement of the liability 
in relation to unaffordable lending complaints. Secondly, the 
extension of, or securing of an alternative, funding facility, with 
the renewal date currently set at 31 March 2023. 
The assessment of the Group’s business plan included review 
of a number of scenarios relating to the key areas
of sensitivities, namely:
• complaints levels;
• collections and loan book quality;
• loan volumes and credit risk; and
• cash availability.
The Group has previously demonstrated its agility in adapting
to emerging challenges, such as the impact of the Covid-19
pandemic in FY21. The scenarios produced covering the
key areas of sensitivities include corrective action to adapt
to potential strains on cash flows arising on rising levels of 
complaints or impacts on collections.
In assessing the business plan the Directors derived three 
scenarios:
1. A base case scenario demonstrated the business was a 
going concern providing that the settlement of Redress 
Claims occurs in an orderly manner over a period of time and 
that complaints levels do not remain at recent peak levels. 
If complaints volumes are higher than this level then this 
will accelerate the settlement of the redress claims liability 
and will therefore have a detrimental impact on liquidity. 
The timing of the settlement of the redress claims liability 
is key to the going concern assessment of the Group. The 
base scenario also assumes funding is available through the 
forecast period in line with the current facility.
2. A scheme scenario showed that with the agreement of a 
Scheme of Arrangement with the FCA, together with the 
protection a related moratorium on paying complaints would 
place on cash, the business would be viable in terms of cash 
generation and future profitability, again subject to assumed 
funding in line with current facility. 
3. In an alternative collect-out scenario the business would 
enter a solvent collect-out with no further lending. In this 
scenario the cash remaining to redress customer complaints 
relating to unaffordable lending would be significantly less.
The base case and the scheme scenarios both assume
a level of funding in line with current facility. In May 2021,
the Group agreed a loan facility with a consortium of
two lenders and this was subsequently extended to 31 March 
2023. Discussions continue with lenders regarding the 
future facility options, as well as other funding sources. We 
draw attention to note 1 in the financial statements, which 
indicates that the Group’s current facility of £35m expires on 
31 March 2023. Discussions continue with lenders regarding 
the covenants within the facility, the extension or deferral of 
the term-out clause which would be enacted by the end of 
September 2022 and would place restrictions on the ability 
of the Group to issue new loans and the facility’s possible 
extension. This term-out clause is pre-existing and essentially 
provides assurance to the funders of the repayment of the 
facility within the last 6 months of the agreed term. In practice, 
this has the effect of converting the rolling credit facility to a 
term loan. This would mean that any subsequent collections 
made on the loan book, would be ringfenced to pay down the 
facility, less any operational costs the business has. Therefore, 
it would place restrictions on the business with regard to the 
issue of new loans. Discussions with the lenders have already 
led to a temporary deferral of the testing of two covenants 
from August to September 2022, to allow time for further 
discussions. These two covenants are linked to profitability and, 
if tested, are likely to fall outside of covenant range. There has 
been no breach, nor waiver of covenants up until the date of 
the report. The Board recognises that as the current funding 
facility is in place for less than 12 months following the date 
of signing the Financial Statements there is also material 
uncertainty regarding secured funding. The Committee 
recognise that the quantum of the redress claim liability and 
timing of settlement, as well as the extension or deferral of the 
term-out clause and funding beyond March 2023 create a 
material uncertainty that may cast significant doubt about the 
Group’s and Company’s ability to continue as a going concern 
such that it may be unable to realise its assets and discharge 
its liabilities in the normal course of business. 
As explained on page 2, the financial statements have 
been prepared on a going concern basis, whilst noting the 
aforementioned material uncertainty.
Critical accounting judgements/estimates and key 
sources of estimation uncertainty
There are both critical accounting judgements/estimates and 
key sources of estimation uncertainty contained within this 
Annual Report. Further details are found on pages 111 to 113.
Meetings of the Committee
The Committee held four scheduled meetings during the year, 
in accordance with its terms of reference. It also held a special 
meeting to review and approve a proposed new model for 
estimating IFRS 9 impairment provisions for the Digital division.
Attendance records can be found on page 56.
Financial Statements
Corporate Governance
Strategic Report
66
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ANNUAL REPORT & ACCOUNTS 2022 

The work undertaken by the Committee included the following 
activities:
•	
A review of the full-year results including the Annual 
Report and Accounts, preliminary results, and the external 
auditor’s report, providing advice (where requested by 
the Board) on whether the Annual Report and Accounts, 
taken as a whole, is fair, balanced and understandable, 
and provides the information necessary for shareholders 
to assess the Group’s position and performance, business 
model and strategy.
•	
In reviewing these documents and determining 
whether they were fair, balanced and understandable, 
the Committee also considered the work and 
recommendations of management.
•	
An interim results review.
•	
A consideration of the appropriateness of accounting 
policies and critical accounting estimates and judgements/
estimates, including a review of information from the Chief 
Financial Officer and reports from the external auditor 
setting out its views on the accounting treatments and 
judgements/estimates in the financial statements.
•	
A review of the external auditor’s control observations 
arising from their external audit of the Company’s 
2021 accounts, and management’s response to the 
recommendations included within it.
•	
A consideration of the level of non-audit work carried out 
for the Group by the external auditor seeking confirmation 
from the auditor that it maintains suitable policies and 
processes to ensure independence. The Committee has a 
non-audit work policy which is reviewed annually.
•	
Overseeing the activities of the Group’s Internal Audit 
function, including its resourcing, its planning, and the 
output of its audit work.
•	
Approving the budgets for internal and external audit 
activities.
•	
Reviewing the adequacy and effectiveness of the Group’s 
Internal Audit function and the robustness of the Group’s 
internal operational and financial controls.
•	
Reviewing access controls, and especially the procedure to 
cover employee joiners, leavers and reassignments.
•	
A review of the going concern assumptions when 
considering interim and final results statements and long-
term viability in the case of the Annual Report & Accounts, 
taking into account internal financial projections.
Review of the 2022 Annual Report and Financial 
Statements
At the request of the Board, the Committee considered 
whether, in its opinion, the 2022 Annual Report and 
Financial Statements, taken as a whole, is fair, balanced and 
understandable and provides the necessary information for 
the reader to assess the Group’s position and performance, 
business model and key audit matters.
Process
In justifying this statement, the Committee considered the 
process in place to create the Annual Report and Financial 
Statements including:
•	
the timely involvement of the Committee in the preparation 
of the Annual Report and Financial Statements which 
enabled it to provide input into the overall messages and 
tone;
•	
the input provided by Group senior management and the 
process of review, evaluation and verification to ensure 
balance, accuracy and consistency;
•	
the regular review of the Group’s internal audit reports 
which are presented at Committee meetings and the 
opportunity for the Non-Executive Directors to meet 
both the external auditors and the Head of Internal Audit 
without any executive of the Group being present via the 
private sessions of the Committee;
•	
the Committee meetings reviewed and considered the 
draft Annual Report and Financial Statements in advance 
of the final sign-off; and
•	
the final sign-off process by the Board.
When forming its opinion, the Committee reflected on the 
information it had received and its discussions through the 
year. In particular, the Committee considered whether:
The report is fair
•	
Are the key messages in the narrative reporting reflective of 
the financial reporting? 
•	
Are the KPIs disclosed appropriate to understanding the 
underlying performance of the Group?
The report is balanced
•	
Is there a good level of consistency between the narrative 
reporting and the financial reporting and is the messaging 
in each consistent when read independently of each other?
•	
Are both the statutory and adjusted financial measures 
explained clearly and given equal priority and prominence?
•	
Are the key judgements/estimates referred to in the 
narrative reporting and the significant issues reported 
in this Audit Committee Report consistent with the 
disclosures and critical judgements/estimates set out  
in the financial statements?
•	
How do these judgements/estimates and issues compare 
with the risks that the external auditor will include in its 
report?
The report is understandable
•	
Is there a clear and understandable structure to the report?
•	
Are the important messages highlighted appropriately 
and consistently throughout the document with clear 
signposting to where additional information can be found?
•	
Is the narrative within the Annual Report and Financial 
Statements straightforward and transparent?
67
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ANNUAL REPORT & ACCOUNTS 2022 

Audit Committee Report 
continued
This assessment was also underpinned by the following:
•	
The papers on critical accounting judgements/estimates 
and key sources of estimation uncertainty presented by 
management to the Audit Committee which documents 
the approach taken to the critical accounting judgements/
estimates and key sources of estimation uncertainty 
documented in the financial statements on pages 111 to 113. 
The assumptions and the going concern statement were 
challenged by the Committee as part of the  
year-end process.
•	
The consistency between the risks identified and the issues 
that are of concern to the Committee.
•	
The comprehensive reviews of the Annual Report and 
Financial Statements 2022 undertaken at different levels in 
the Group which aims to ensure consistency and  
overall balance.
•	
The external auditor’s report on the Annual Report and 
Financial Statements 2022.
Conclusion
Following its review, and having taken into account all the 
matters considered by the Audit Committee and brought to their 
attention during the year, the Committee reported to the Board 
that it was satisfied that the Annual Report and Accounts, taken 
as a whole, is fair, balanced and understandable.
External audit
The Group’s external auditor is Deloitte LLP.
The Committee is responsible for reviewing the objectivity, 
independence and cost-effectiveness of the external auditor.
The Committee also reviews the performance of the auditor, 
taking into account the services and advice provided to the 
Group and the fees charged for these services. The CFO, 
Finance Director and other senior executives provide feedback 
to the Board and Audit Committee, on a regular basis 
regarding the services received from the external auditor.
During the year, the Committee reviewed its non-audit work 
policy which is designed to mitigate any risks threatening, or 
appearing to threaten, the external auditor’s independence 
and objectivity.
As part of the Committee’s remit, we monitor the level of 
non-audit work carried out by the external auditor. During the 
year to 26 February 2022, the level of audit fees amounted to 
£728k (FY21: £312k), and non-audit fees amounted to £36k 
(FY21: £35k). The ratio of non-audit fees to audit fees was 
4.9% (FY21: 11.2%). The non-audit work carried out during FY22 
related solely to the review of the interim results. 
Deloitte LLP was first appointed as auditor of Morses Club 
Limited with effect from 1 March 2009 as a result of a 
competitive audit tender. As a company listed on AIM, Morses 
Club PLC is not a Public Interest Entity and therefore is not 
required to review its external auditor after 10 years.
Deloitte LLP have notified the Company of their intent to 
stand down as external auditor. A new external auditor will be 
announced once appointed.
Internal Audit function
The Group has an Internal Audit function which was headed for 
the majority of the year by an experienced and highly qualified 
Head of Internal Audit who reported directly to the Chair of 
the Audit Committee. The Internal Audit function objectively 
reviews the Group’s internal control processes using a risk-
based internal audit plan and audit charter approved annually 
by the Committee. The plan is based primarily on output from 
the risk management process, but it is flexible and may include 
ad hoc investigations and other assurance work agreed by the 
Committee. Specialist technical knowledge and resources are 
sourced externally when required.
During the year, the Head of Internal Audit undertook an 
internal promotion to another part of the Group. Since 
then, any reviews normally undertaken by the Internal Audit 
department have been outsourced and the Company is 
currently reviewing its approach to Internal Audit.
During the year, the Internal Audit function delivered a diverse 
selection of reviews. This year saw assurance work on areas 
such as lead generation for the Digital division, penetration 
testing, and IT development. Outsourced work included an 
audit of financial crime management within the Digital division 
and financial resilience in the HCC division.
The Committee closely reviews the reports of the Internal Audit 
function. Its work is primarily risk-based, utilising the Group’s 
risk registers and in consultation with the Executive team to 
identify key risks which are then prioritised. The Committee has 
found the reports to be both incisive and timely, and presented 
in a way that is well articulated.
The Head of Internal Audit was invited to attend all of the 
Committee’s meetings and met the Committee members on 
an annual basis without management present, the last time 
being in June 2021.
The Committee annually assesses the effectiveness of the 
Internal Audit function and has satisfied itself that the quality, 
independence, experience and expertise of the function is 
appropriate for the business.
FRC Corporate Reporting Review team 
There was no interaction with the FRC’s Corporate Reporting 
Review team during the year.
Approval
On behalf of the Audit Committee
Sheryl Lawrence
Chair
25 August 2022
Financial Statements
Corporate Governance
Strategic Report
68
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Risk & Compliance
Committee Report
WHAT DOES THE COMMITTEE DO? 
The principal purpose of the Risk &  
Compliance Committee is to assist the  
Board in its oversight of risk and regulatory  
compliance within the Group with particular  
focus on the FCA’s developing requirements,  
risk appetite, risk profile and the effectiveness  
of the Group’s internal controls and risk  
management systems. Emerging risks are  
captured via the firm’s horizon scanning  
approach, which is a combination of  
substantive review of the regulatory landscape 
and relationships with external stakeholders  
e.g., regulators, trade associations, legal  
partners etc. See also page 28. The 
Committee ensures that there is an 
ongoing process for identifying, evaluating 
and managing the principal risks faced 
by the Group. Following the Committee’s 
annual review, it is their opinion that the 
Risk Management Framework is fully fit for 
purpose. 
The Board and its Committees discharge  
their duties in this area through:
•	
the review of financial performance 
including budgets, KPIs, forecasts and  
debt covenants on a regular basis; 
•	
the receipt of reports which provide an 
assessment of key risks and controls and 
how effectively they are working, including 
a robust assessment of the Group’s 
emerging and principal risks. Many risks 
have increased in weighting and we have 
material uncertainty over going concern; 
•	
scheduling annual Board reviews of 
business strategy, including reviews  
of the material risks and uncertainties 
facing the business; 
•	
the receipt of reports from senior 
management on the risk and control 
framework as well as culture within  
the Group; and 
•	
the presence of a clear organisational 
structure with defined hierarchy and  
clear delegation of authority. 
These arrangements are regularly reviewed 
by the Committee and have been in place for 
the year under review and up to the date of 
approval of the Annual Report and Accounts. 
Reports are also received from management 
in respect of key controls as set out in the 
Compliance Monitoring Plan and reviewed 
on a regular basis. The Committee closely 
monitors any areas where a requirement for 
improvement has been highlighted. These are 
addressed by an improvement to policies and 
procedures supported by the introduction 
of enhanced technology for the agents and 
operational management. The Committee’s 
terms of reference are available on the 
Group’s website. 
Dear Shareholder,
As Chair of the Risk & 
Compliance Committee, I am 
pleased to present my report 
which covers the year ended 
26 February 2022. 
The report provides insight into the 
composition of the Committee and the 
work that it undertakes to ensure that:
•	 the Group is compliant with the 
FCA’s rules and regulations; 
•	 the Group’s risk management 
policies and procedures are kept 
continuously under review; and 
•	 the Group’s risk management 
framework is operating effectively. 
COMMITTEE MEMBERS 
Michael Yeates (member from 1 May 2021, and  
Chair upon approval from the FCA on 26 July 2021) 
Joanne Lake (Interim Chair from 13 February 2021 to  
25 July 2021). Left 31 March 2022. 
Sir Nigel Knowles until he was appointed Board Chair on  
1 March 2022
Sheryl Lawrence (from 1 May 2021)
ANNUAL REPORT & ACCOUNTS 2022 
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 69

Composition and governance 
In addition to my role as Chair of the Risk & Compliance 
Committee, I am also a member of the Audit Committee.  
The Committee consists of all of the independent  
Non-Executive Directors. 
The other Directors are also invited to attend meetings, 
together with appropriate members of the Executive team  
in order to ensure that all relevant information is available to 
the Committee. 
How the Committee discharged its responsibilities 
The Committee held four meetings during the year to  
26 February 2022, with a further meeting held on 
1 March 2022. 
Both the Risk Executive Committee and the Credit Risk 
Committee of Morses Club have reported directly to this Risk 
& Compliance Committee and summaries of their minutes 
are sent to all members of this Committee. In addition, the 
Committee also receives reports and updates from the Shelby 
Finance Limited subsidiary. 
A self-assessment internal review of the performance of the 
Committee concluded that it had discharged its responsibilities 
during the year. It also confirmed that it was satisfied with the 
effectiveness of the Group’s risk management function. As the 
new Chair, I have ensured that the Committee concentrates 
even more on areas of potentially higher risk, but in general I 
am satisfied with the functioning of the Committee, and the 
information provided by management. 
The Morses Club strapline is ‘Putting You First’; customers are 
at the heart of the Group’s culture, vision and values. In recent 
years, the level of public and regulatory scrutiny of the Group’s 
marketplace has grown. The Board recognises the importance 
of risk and compliance to the business and the need to devote 
time and energy to these vital areas. 
The Committee is responsible for reviewing and reporting to 
the Board on a number of topics, including: 
•	
the Group’s risk appetite (the extent and categories of risk 
regarded by the Board as acceptable for the Group to 
bear). The Committee has a low-risk appetite in all areas of 
the business except for credit risk, which is moderate due 
to the nature of the non-standard sector that the Group 
operates in. The Committee monitors adherence to risk 
appetite on a regular basis assisted by the Executive; 
•	
the Group’s risk management and internal controls 
framework (its principles, policies, methodologies, systems, 
processes, procedures and people); 
•	
processes and procedures to ensure that the Group 
operates in compliance with external regulators, for 
example, the FCA and the ICO; 
•	
the arrangement for the identification, assessment, 
monitoring, management and oversight of risk with regard 
to processes and procedures; 
•	
the effectiveness of the Group’s internal controls, 
compliance monitoring and risk management systems; and 
•	
the Group’s procedures for preventing and detecting 
money laundering and fraud. 
The Committee has a formal schedule for matters to be 
discussed at the various meetings. These include a regular 
review of: 
•	
the work done by the Executive Team’s Risk Committee; 
•	
the work done by the Executive Team’s Credit Risk 
Committee; 
•	
the Money Laundering Reporting Officer’s (MLRO) Report; 
•	
the Group’s assessment and management of conduct risk; 
•	
the Group’s policies and practices for treating customers 
fairly and ensuring consistently good customer outcomes; 
•	
the Group’s compliance monitoring activities; 
•	
information and cyber security, including adherence to 
GDPR; 
•	
the business continuity and disaster recovery plan and 
testing thereof; 
•	
the Group’s overall levels and types of insurance; 
•	
customer complaints; 
•	
financial crime; 
•	
whistle-blowing; and 
•	
regulatory matters, including those relating to the FCA. 
Activities during the year 
During the year, some of the key topics addressed by the 
Committee included customer complaints, cyber security 
and data protection, Treating Customers Fairly, regulatory 
matters, whistle-blowing policy, and further enhancements to 
our system for checking each customer’s affordability which 
includes an update to the minimum expenditure values to 
capture recent overall inflation and fuel/utility price increases. 
Identifying risks 
The Committee regularly reviews the procedures adopted by 
the Group to manage its risk. The Committee and the Board 
take a generally low-risk approach to risk. Risks with a relatively 
high likelihood and/or impact are kept under constant review.
The Committee carries out a robust assessment of the Group’s 
emerging and principal risks as described on pages 24 to 29.
Defined risk analysis criteria enable the Internal Audit function 
to identify areas of focus on the Board Risk Register. In 
consultation with the Audit Committee, the risk analysis criteria 
have been set as the following: 
•	
A significant variance between inherent and residual 
risk. A large variance indicates where the business is 
placing significant reliance on controls to be designed and 
operating effectively to bring the risk to an acceptable level. 
•	
A high inherent rating. Within the business’s risk registers, 
all risks with a high inherent rating have the possibility of 
causing significant harm to the business if mitigations are 
ineffective. 
Using the above criteria, Internal Audit has been able to identify 
focus areas on the Board Risk Register. 
Risk & Compliance
Committee Report continued
70
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 
Financial Statements
Corporate Governance
Strategic Report

Cyber security and data protection 
Cyber security has been a major topic for the Committee. 
During the year, the Group continued to perform penetration 
testing using external specialists. Regular phishing exercises 
are conducted in order to maintain employee vigilance against 
genuine attacks. All data is now encrypted at rest. 
Regulatory matters 
The Committee has been actively involved in the Group’s 
continuing constructive dialogue with the FCA, notably 
concerning complaints and a potential Scheme. The Group has 
also submitted data to the FCA regarding financial resilience 
and operational matters on a regular basis. 
Treating Customers Fairly 
At each meeting, the Committee reviews the Group’s 
dashboard for Conduct Risk and Treating Customers Fairly. 
During the year, the HCC division has implemented further 
enhanced affordability procedures. This, together with a new 
loan optimisation initiative, has enhanced our affordability 
process and the customer journey for agents and customers at 
the point of sale. 
Whistle-blowing 
During the year, the Committee reviewed the Group’s 
whistle-blowing procedures. The subject has been included 
in two online training courses which are mandatory for staff 
to complete. They have also featured on the staff intranet. 
The Group has consistently highlighted to its staff the FCA’s 
whistle-blowing hotline as well as providing both an internal 
contact telephone number and email address, together with 
the contact details of one of our Independent Non-Executive 
Directors. During the year, there have been no reportable 
breaches and no whistle-blowing instances. 
Customer complaints 
The Group generates excellent customer satisfaction rates 
(as shown on pages 14 and 15. During the last year, the 
Group extended its customer satisfaction surveys to its Digital 
operation for the first time, achieving a satisfaction rate of over 
90%. 
The Committee continues to play a part in ensuring that 
management maintains its clear focus on Treating Customers 
Fairly and good customer outcomes. The Committee always 
invites the Group’s Customer Experience Director to  
its meetings. 
The Committee noted the continued high standards 
maintained by the complaints handling team as demonstrated 
by its continued accreditation of ISO 10002:2018 for 
complaints handling. It was particularly pleasing to read 
comments supporting the business ethos of continual 
improvement, whilst satisfying stakeholder and customer 
needs. Management systems and processes were found to be 
effectively implemented in line with the spirit and requirements 
of this certification. 
In February 2022, the Group announced that its profitability in 
FY22 would be impacted by the level of unaffordable lending 
claims received prior to the announcement. This followed 
significant claims management company activity, from which 
a discernible trend has emerged on the cases being upheld 
by the Financial Ombudsman Service which could be applied 
retrospectively. The rise in complaints volumes prompted a 
review of the root cause of complaints received which led to a 
review of historic lending. See page 2 for further details.
In response to market developments, including the level of 
claims received, the Group has taken steps to develop its credit 
policies and product proposition in both divisions, tightening 
lending criteria and assessing the borrowing patterns of our 
customers.
Business continuity 
The Committee was pleased to see that the Group has 
continued to operate successfully through a mixture of remote 
and face-to-face working, in accordance with government 
guidelines, since the start of the Covid-19 pandemic. Morses 
Club has continued to lend to new customers without 
interruption by Covid-19 since July 2020. 
The future 
A third-party audit of the Group’s Risk & Compliance function 
is due to take place during the next 12 months. This will bring 
an outside perspective that can be valuable every few years. A 
section on the Group risks can be found on pages 24 to 29. 
Covid-19 
The Committee has been kept fully informed of the actions 
taken by the Group in response to the unprecedented effects of 
the Covid-19 virus. It reviewed these actions and was satisfied 
by the speed of response and the diligence of the Group and its 
employees to the challenges posed by this pandemic. 
Covid-19 features strongly in the Group’s risk register and 
the Committee will continue to monitor the wellbeing of the 
business, its customers, agents, staff and other stakeholders. 
Climate change
Regarding climate change, the Group does not currently see 
this as a principal risk to the business. Nevertheless, during the 
last year we have: 
•	
reduced the quantity of properties that we occupy; 
•	
reduced our transport and fuel usage considerably; 
•	
installed LED lighting, sensor lighting and thermostat 
heating at our support centre; and 
•	
installed sensor lighting and blind fittings to the windows at 
our Leeds site. 
The subject of climate change, and any potential threats to the 
business arising from this, will continue to be monitored closely.
Approval 
On behalf of the Risk & Compliance Committee 
Michael Yeates 
Chair 
25 August 2022
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 71

Remuneration Report
The Directors’ Remuneration Statement deals with the 
remuneration for those Directors in place during the year to 
26 February 2022. The CFO, Graeme Campbell, has served 
as a Director since the start of the year. Paul Smith served 
as CEO until 18 February 2022. Gary Marshall, previously 
COO, became an Executive Director on 1 May 2021 and was 
subsequently appointed CEO on 21 February 2022. 
Remuneration & Corporate Social Responsibility 
Committee 
The terms of reference for the Committee are available online 
at www.morsesclubplc.com. The Committee has studied 
Section B of the Best Practice provisions annexed to the Listing 
Rules of the UK Listing Authority and has voluntarily disclosed 
the information given below. 
This Committee’s principal function is to determine the Group’s 
policy on executive remuneration. No Director plays any part 
in formal decisions about their own remuneration. The HR & 
Communications Director and Chief Financial Officer provide 
relevant updates on financial and general Group remuneration 
matters as invited individuals only. The Committee meets 
periodically when it has proposals to consider – generally three 
times a year. In any event, the Committee would meet no less 
than twice a year. 
The Committee’s policy aims primarily to attract, retain 
and motivate high-calibre individuals via a competitive 
remuneration package designed to suit the market, taking 
account of regulatory requirements and the need to create 
an appropriate mix between fixed and variable rewards (both 
short and long-term) for Directors. Executive remuneration 
comprises basic salary, performance-related bonus, pension 
benefits, other benefits in kind and a deferred share plan 
granted pursuant to the Morses Club PLC Group. 
This Remuneration Report is due for approval at the 
Annual General Meeting on 4 October 2022. Remuneration 
proposals are supported by external benchmarking to 
determine external market trends and to ensure that Director 
remuneration is proportionate and in line with individual and 
business performance. 
The approach to Directors’ 
remuneration has been 
completed taking account 
of the market, regulatory 
environment, the need 
to deliver shareholder 
return and individual role 
responsibilities. 
Committee members: 
Sir Nigel Knowles – Chair from 1 April 2022 
Sheryl Lawrence – from 1 February 2022 
Michael Yeates – from 25 April 2022 
Joanne Lake – Chair until 31 March 2022 
Stephen Karle – until 28 February 2022 
Financial Statements
Corporate Governance
Strategic Report
72
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Executive remuneration policy 
The Executive team and the Committee continue to be 
committed to continued diligence in setting executive 
remuneration to ensure market relevance, and the delivery of 
shareholder value as well as continuing to embed the Group’s 
strategy. The Group’s remuneration policy is aligned to its 
purpose, values and strategy by looking at short and long-term 
objectives, together with adherence to its values, for example 
Treating Customers Fairly. 
Executive remuneration continues to be balanced against the 
remuneration of the rest of the organisation. Our remuneration 
policy is underpinned by core principles as outlined below: 
•	
Remuneration is determined within the Company’s risk 
appetite and is subject to oversight and approval by the 
Remuneration Committee. 
•	
Key FCA principles, including the principles of Treating 
Customers Fairly apply throughout. Although all 
employees should contribute towards a commercial result, 
remuneration is designed to drive a ‘balanced scorecard’ 
approach, based on responsible lending principles and 
outstanding individual performance. Delivery of good 
customer outcomes is central to the Group’s remuneration 
approach. 
•	
Remuneration structures have been developed in line with 
the appropriate regulatory environment, including the 
SM&CR and the Group’s values. 
•	
A blend of short-term and long-term incentives aimed  
at supporting the long-term security of the Group and its 
employees. 
•	
For key roles, remuneration will take account of pay 
structures in the external market. Remuneration structures 
will reflect the size and the scope of any given role. 
•	
Remuneration will be driven by Group as well as individual 
performance, with a foundation of fairness and ability to 
pay. 
•	
We will communicate policies clearly and in a timely manner. 
Committee decisions on remuneration 
In addition to targets being set in respect of profitability and 
Total Shareholder Return (TSR), Directors are also required 
to satisfy the Committee that their personal actions and 
performance meet the required standards, namely:
a)	 the Participant’s personal performance has been 
satisfactory; 
b)	 the Participant has not been subject to any disciplinary 
action; 
c)	 all the Group’s internal and external audits have been 
satisfactory; 
d)	 the Group has appropriately delivered compliance training 
to all of its relevant employees; 
e)	 the Group has obtained and retained all relevant FCA 
authorisations for the carrying of its business; and 
f)	 the Group has appropriately managed all of its material 
customer and conduct risks. 
Due to the impact of the cost of complaints, the targeted 
Adjusted Profit Before Tax1 level was not reached, so no 
executive bonus is payable for FY22 and all executive share 
options awarded during the year have lapsed. The bonuses 
shown below as having been paid in FY22 were awarded  
in FY21.
Directors’ remuneration
Name
Role
Base  
Salary
Allowance  
and Benefits
 Pension 
Contribution
Bonus
Deferred  
Share Plan
Expenses
Total  
Remuneration
Total  
Fixed Pay
Total  
Variable Pay
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
Paul  
Smith1
CEO
 313,504 
 302,940 
 19,448 
 18,813 
 20,378 
 17,040 
 151,470 
–
 181,525 
 140,483 
 9,572 
 3,313 
 695,897 
 482,589 
 353,330 
 338,793 
 342,567 
 143,796 
Gary 
Marshall2
COO/
CEO
 183,333 
–
 3,903 
–
 12,833 
–
 67,500 
–
–
–
 1,735 
–
 269,305 
–
 200,070 
–
 69,235 
–
Graeme 
Campbell
CFO
 220,000 
 36,667 
 12,000 
 2,000 
 11,000 
 1,833 
 36,667 
–
–
–
–
–
 279,667 
 40,500 
 243,000 
 40,500 
 36,667 
–
Andy 
Thomson3,10
–
 170,984 
–
 7,588 
–
 12,033 
 82,323 
–
 139,200 
 107,699 
–
 1,517 
 221,523 
 299,821 
–
 190,605 
 221,523 
 109,216 
Andrew 
Hayward4
–
 106,449 
–
 4,406 
–
 1,108 
–
–
–
–
–
459
–
 112,422 
 – 
 111,963 
–
459
Total
 716,838 
 617,040 
 35,351 
 32,807 
 44,211 
 32,014 
 337,960 
 – 
 320,725 
 248,182 
 11,307 
 5,289  1,466,393 
 935,332 
 796,400 
 681,861 
 669,992 
 253,471 
73
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Non-Executive Directors
Name
Role
Base 
 Salary
Additional 
Responsibility Payments
Expenses
Total  
Remuneration
Total  
Fixed Pay
Total  
Variable Pay
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
2022
£
2021
£
Stephen Karle5
Chair
 120,000 
 120,000 
–
–
 1,615 
 583 
 121,615 
 120,583 
 120,000 
 120,000 
 1,615 
 583 
Sir Nigel Knowles6
Senior Independent NED
50,000
50,000
7,500
7,500
–
 333 
 57,500 
 57,833 
57,500
57,500
–
 333 
Joanne Lake7
Chair of Remuneration 
Committee and  
Interim Chair of Audit and 
Risk & Compliance 
Committees
50,000
50,000
 14,135 
 7,500 
–
–
 64,135 
 57,500 
57,500
57,500
–
–
Peter Ward
NED
50,000
50,000
–
–
–
 1,015 
 50,000 
 51,015 
50,000
50,000
–
 1,015 
Sheryl Lawrence8
Chair of Audit Committee
 41,667 
–
 6,250 
–
–
–
 47,917 
–
 47,917 
–
–
–
Michael Yeates9
Chair of Risk & Compliance 
Committee
 41,667 
 – 
 6,250 
–
–
–
 47,917 
–
 47,917 
–
–
–
Andy Thomson3, 10
NED
 33,333 
 12,500 
–
–
–
–
 33,333 
 12,500 
 33,333 
 12,500 
–
–
Les Easson11
NED
 4,167 
 50,000 
–
–
–
–
 4,167 
 50,000 
 4,167 
 50,000 
–
–
Baroness  
Simone Finn12
Chair of Audit and Risk & 
Compliance Committees
–
 47,756 
–
 9,551
–
–
–
 57,307 
–
 57,307 
–
–
Total
 390,834 
 380,256 
 34,135 
 24,551 
 1,615 
 1,931 
 426,583 
 406,738 
 424,968 
 404,807 
 1,615 
 1,931 
1	
P Smith left the business as CEO on 18 February 2022. Paul was the highest paid Director.
2	
G Marshall was appointed Executive Director on 1 May 2021. He was subsequently appointed CEO on 21 February 2022. 
3	
A Thomson stepped down as a NED on 17 March 2020 and became CFO on the same date.
4	
A Hayward resigned on 17 March 2020. His base salary for 2021 of £106,449 includes £90,615 notice pay.
5	
S Karle resigned as Board Chair on 28 February 2022.
6	
Sir Nigel Knowles was appointed Board Chair on 1 March 2022 and on the same date stepped down as Senior Independent NED.
7	
J Lake stepped down as a NED on 31 March 2022.
8	
S Lawrence was appointed as a NED on 1 May 2021 and Chair of the Audit Committee on 3 September 2021. On 1 March 2022 she became the Senior Independent NED.
9	
M Yeates was appointed as a NED on 1 May 2021 and Chair of the Risk & Compliance Committee on 26 July 2021.
10	 A Thomson stepped down as a CFO on 1 January 2021 and became a NED on the same date. He resigned as a NED on 31 December 2021.
11	 L Easson stepped down as a NED on 17 March 2021.
12	 S Finn stepped down as a NED on 12 February 2021.
Directors’ remuneration policy 
Service contracts 
All Executive Directors have a service contract as part of 
the arrangements covering a continuous period (i.e., not 
a fixed term), with a notice period of six months applying 
to both the Company and to individuals. There have been 
no compensation payments for loss of office. This includes 
the instance of the then CEO leaving the business on 
18 February 2022. 
Letters of appointment 
Non-Executive Directors do not have service contracts but 
are appointed under letters of appointment in line with the 
requirements of the Senior Managers and Certification Regime. 
The appointments are for three years but they are subject 
to annual re-election. All new appointments would be made 
following recommendations by the Nominations & Succession 
Committee. No compensation is payable in the event of early 
termination except during the notice period. 
Allowances and benefits 
Taxable benefits received in the period include company 
cars or car allowances, fuel allowances and private medical 
insurance. These apply to Executive Directors only. The Chair 
and Non-Executive Directors do not receive any allowances  
or benefits. 
Additional responsibility payments 
Non-Executive Directors who chair the Audit, Risk & 
Compliance, and Remuneration & CSR Committees, together 
with the Senior Independent Director, are entitled to receive 
additional responsibility payments. 
Life assurance 
In line with all employees, Executive Directors are entitled to life 
assurance equivalent to four years’ salary. 
Holidays 
Executive Directors are entitled to 30 days’ paid holiday in 
addition to UK public bank holidays. The holiday year runs from 
January to December. In addition, Directors can purchase an 
additional 10 days’ holiday in each calendar year. 
Pension 
Executive Directors are enrolled into the Company pension 
scheme. Personal contributions are matched by the Company 
up to a maximum of 7%. This level of Company contribution 
is the same for all employees and Directors, and therefore 
complies with Provision 38 of the 2018 Corporate Governance 
Code recommendations regarding executive pensions. 
Remuneration Report 
continued
Financial Statements
Corporate Governance
Strategic Report
74
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Annual bonus 
The annual bonus is the value of the bonus 
earned within the year and can be up to 
100% of salary, based on the performance 
conditions outlined below. Any earned bonus 
is payable in August following the year end in 
February, conditional on independent audit 
and confirmation by the Committee. 
Performance bonus conditions 
The performance bonus is payable if the 
Executive Director has delivered key objectives, 
including targeted adjusted profit before tax1, 
promoting good-quality customer outcomes 
(i.e., Treating Customers Fairly), maintenance 
of headline customer satisfaction scores  
and completing key strategic projects  
and acquisitions, all underpinned by  
regulatory compliance.
Deferred share plan (this section is subject 
to audit) 
Executive Directors may participate in a 
deferred share plan, a three-year plan 
(commencing 2016/17) awarded through an 
annual deed of grant, subject to the discretion 
of the Remuneration Committee. There have 
been no variations to the terms and conditions 
or performance criteria for share options 
during this financial year. Awards under the 
Deferred Share Plan (DSP) may be in the form 
of: 
•	
A conditional right to acquire Ordinary 
Shares at no cost to the participant or 
for the nominal cost of 1p, or an option 
to acquire Ordinary Shares at no cost to 
the participant (or 1p) or a right to receive 
a cash amount relating to the value of 
a certain number of notional Ordinary 
Shares. 
•	
Share awards will be subject to 
performance conditions which are: 
delivery of targeted adjusted profit before 
tax1, total shareholder return (measured 
over a period of one year’s satisfactory 
audits), compliance training, and individual 
executive performance. 
•	
Awards will be granted on an annual basis. 
•	
Awards will vest on the third 
anniversary following the grant date 
(unless determined otherwise by the 
Remuneration Committee). Awards 
will lapse should an individual leave 
employment and are not transferable. 
2018/19 Award 
The table below details the maximum earnings from the deferred share plan in 
2018/19. The share price at the date of the award was £1.54.
Name
Role
Percentage of 
Salary
Share  
Award
Paul Smith
CEO
100
213,400
Andy Thomson
CFO
100
163,600
2019/20 Award 
No shares were awarded for 2019/20 since the TSR performance condition 
measure was not met. 
2020/21 Award 
The table below details the maximum earnings from the deferred share plan in 
2020/21. The issue price of the shares was £0.622.
Name
Role
Percentage of 
Salary
Share  
Award
Paul Smith
CEO
100
222,162
Andy Thomson
Interim CFO
100 pro rata
120,744
Graeme Campbell
CFO
100 pro rata
53,779
2021/22 Award 
The profit target and TSR performance conditions specified in the 2021/22 
award were not met, and as a consequence the award lapsed. 
Vesting of 2018 award 
The Committee confirmed that the performance conditions for the 2018  
award were satisfied, and the awards duly vested in August 2021. The then 
CEO exercised only that element of the option to satisfy HMRC obligations  
(sell to cover). 
In addition, Andy Thomson who was an Executive at the time that the award 
was granted in May 2018, also exercised only that element of his options to 
satisfy HMRC obligations. No further shares have been exercised.
Name
Role
Shares 
Vested
Sell to Cover
Shares 
Retained
Paul Smith
CEO
246,150
(118,152)
127,998
Andy Thomson
NED
188,757
(90,603)
98,154
Directors’ shareholdings
The table below details the shareholdings and other share interests of the 
Directors as at 26 February 2022.
Name
Role
Ordinary 
Shares
Percentage 
Shareholding
Stephen Karle 
Chair
227,991
0.27
Graeme Campbell 
CFO
40,000
0.03
Gary Marshall
CEO
350,000
0.26
Peter Ward
NED
40,000
0.30
Sir Nigel Knowles
Senior Independent Director
55,148
0.04
Joanne Lake 
Independent NED 
23,142
0.02
1	
Definitions are set out in the Glossary of Alternative Performance Measures on pages 147 to 149.
2	
The Committee was unwilling to offer a share award to the Executives based on the reduced share price as at May 2020. The award was therefore granted using a 
deemed share price of £1.36 which was the average share price for the awards in the previous four years.
75
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

All-employee remuneration
In setting the remuneration policy for Directors, the pay and conditions of other 
employees are considered along with any increases in salary. The Committee 
is provided with data on the remuneration structure for those management 
level tiers below the Executive Directors; it uses this information to ensure a 
consistent approach to remuneration throughout the Group. 
There is no formal consultation with employees regarding the remuneration of 
Executive Directors. 
All Morses Club employees have the opportunity to participate in our key 
benefits such as life assurance, private health and the Company pension 
scheme. 
The Group issues shares to Morses Club employees under the framework of 
its approved employee share option scheme. In December 2021, all eligible 
employees received a share award of 3.25% of salary under the Group’s Share 
Incentive Plan. 
Changes in Directors’ pay in relation to all employees 
The table below shows the percentage change in remuneration of the Directors 
and employees of the Group between the 2021 and 2022 financial years.
Salary or fee 
%
Benefits 
%
Bonus3 
%
Employees 1, 2
4
18
100
Executive Directors:
Paul Smith
3
24
100
Gary Marshall 4 
19
28
100
Graeme Campbell 5
156
82
100
Non-Executive Directors
Stephen Karle
0
N/A
N/A
Joanne Lake 6
12
N/A
N/A
Sir Nigel Knowles
0
N/A
N/A
Peter Ward
0
N/A
N/A
Michael Yeates 7
N/A
N/A
N/A
Sheryl Lawrence 7
N/A
N/A
N/A
1	
The strict legal requirement is to only provide details of employees of Morses Club PLC, so we have 
decided to voluntarily disclose in respect of all Group employees. 
2	
For the purposes of this calculation, we have compared the salary, benefits and bonus of all 
employees who worked for the Group for the full years of FY21 and FY22. 
3	
No bonus was paid in FY21, but a bonus was paid to eligible Directors and employees in FY22. 
4	
G Marshall was appointed an Executive Director on 1 May 2021 and was appointed CEO on  
21 February 2022. 
5	
G Campbell joined the Company on 20 October 2020. Most of the increase in his salary and benefits 
was the result of him working a full year in FY22. 
6	
The increase in J Lake’s fee was solely due to the Additional Responsibility Payments arising from 
her role as Interim Chair of the Audit and the Risk & Compliance Committees for a few months during 
the year. 
7	
M Yeates and S Lawrence were appointed on 1 May 2021 and therefore there are no comparative 
figures for FY21. 
CEO pay ratio
We have detailed the CEO pay ratio below. 
The updated CEO pay ratios which now 
include the value of shares vested in the 
period are:
FY22
Percentile
Value
CEO Pay 
Ratio
25th
£24,520.65
28:1
Medium
£33,710.73
21:1
75th
£42,840.00 
16:1
FY21
Percentile
Value
CEO Pay 
Ratio
25th
£28,915.15 
17:1
Medium
£32,521.68 
15:1
75th
£42,067.51 
11:1
The variation from the ratio in FY21 is due to 
the absence of any bonus payments during 
this year. 
Relative importance of spend on pay 
The total pay (including performance bonuses) 
for all Morses Club PLC employees for FY22 
is £17,172,453 compared to £22,599,004 for 
FY21. The total pay for Shelby Finance Limited 
for FY22 is £6,107,582 (FY21: £5,293,110). 
Corporate Social Responsibility (CSR)
Due to Covid-19 restrictions, the Group has 
again run a very limited CSR programme 
during FY22. The Group donated a total of 
£7,150 to good causes, including £5,000 to the 
Cornwall Hospice after it provided end-of-life 
care for a senior member of the management 
team during the year (FY21: £7,500). 
 
Sir Nigel Knowles 
Chair – Remuneration & Corporate 
Social Responsibility Committee 
25 August 2022
Remuneration Report 
continued
Financial Statements
Corporate Governance
Strategic Report
76
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Disclosure Committee 
Report
The Board of Directors
The Company is required to make timely and accurate 
disclosure of all information required to meet the legal and 
regulatory obligations and requirements arising from its listing 
on the London Stock Exchange under the Market Abuse 
Regulations (MAR). 
The Disclosure Committee exists to help the Company meet 
these requirements. The Committee’s responsibilities include 
determining the timely disclosure of material information, and 
assisting in the design, implementation and periodic evaluation 
of disclosure controls and procedures. 
Although AIM-listed companies are no longer required to 
maintain insider lists, there is still an obligation to take all 
reasonable steps to ensure that people with access to inside 
information acknowledge their legal and regulatory duties, and 
a company must be able to provide the FCA with an insider list, 
upon request. In practice, this means Morses Club has chosen 
to retain an up-to-date insider list. 
On 18 February 2022, the Committee held a special meeting 
to review an updated projection from the Finance Department 
for the likely FY22 results. Since the adjusted profit before tax1 
for FY22 was estimated to be 20%-30% below the market 
consensus, the Committee agreed that the Company should 
issue a trading statement immediately on the next working 
day. The resulting trading update was released the following 
working day, 21 February 2022, before markets opened.
Following the year end, the Committee held two further 
meetings which agreed to the announcement on 25 May 2022 
of a delay in reporting the FY22 results until August 2022, 
and one on 21 June 2022 regarding the potential Scheme. 
These announcements were released on the next working day 
following the meeting, before markets opened.
The Committee held two meetings during the year. 
Approval 
On behalf of the Disclosure Committee 
Sir Nigel Knowles 
Chair
25 August 2022
1	
Definitions are set out in the Glossary of Alternative Performance Measures on  
pages 147 to 149.
COMMITTEE MEMBERS: 
Stephen Karle (Chair until 28 February 2022)
Sir Nigel Knowles (Chair from 1 March 2022)
Sheryl Lawrence (from 1 May 2021)
Michael Yeates (from 1 May 2021)
Peter Ward
Gary Marshall (COO, Executive Director from  
1 May 2021, then CEO from 21 February 2022)
Graeme Campbell (CFO)
Andy Thomson (until 31 December 2021)
Les Easson (until 17 March 2021)
Paul Smith (CEO until 18 February 2022)
Joanne Lake (until 31 March 2022)
77
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Directors’ Report
The Corporate Governance Report set out on pages 50 to 77 
forms part of this report. 
Information about the use of financial instruments by the 
Company and its subsidiaries is given in Note 26 to the 
financial statements. 
DIRECTORS 
The Directors of the Company who served during the year 
ended 26 February 2022, and up to the date of this report, 
are: 
Sir Nigel Knowles
Senior Independent Director to  
28 February 2022 and Non-Executive 
Chair from 1 March 2022
Peter Ward
Non-Executive Director
Sheryl Lawrence
Independent Non-Executive Director 
from 1 May 2021 and Senior Independent 
Director from 1 March 2022
Michael Yeates
Independent Non-Executive Director  
from 1 May 2021
Graeme Campbell
Chief Financial Officer
Gary Marshall
COO and Executive Director from 1 May 
2021, then Chief Executive Officer from  
21 February 2022
Joanne Lake
Independent Non-Executive Director,  
until 31 March 2022
Stephen Karle
Non-Executive Chair,  
until 28 February 2022
Paul Smith
Chief Executive Officer,  
until 18 February 2022
Andy Thomson
Non-Executive Director,  
until 31 December 2021
Les Easson
Non-Executive Director,  
until 17 March 2021
Details of the remuneration, service agreements and interests 
in the share capital of the Company of the Directors are given 
in the Remuneration Report on pages 72 to 76. 
Biographical details of the current Directors are given on pages 
46 to 47. As recommended by the July 2018 edition of the UK 
Corporate Governance Code, all continuing Directors stand for 
re-election at the Company’s Annual General Meetings. 
Dividend
The Directors have a general policy of assessing dividend 
payments in the context of consolidation opportunities, new 
product investment requirements and the broader growth 
strategy of the Group. Under normal circumstances, the 
Board intends to distribute between 50% and 60% of adjusted 
earnings after tax to shareholders as dividends. 
On at least an annual basis, and before proposing a dividend 
payout, the Directors assess the Group’s going concern 
assumptions through a detailed review of the future capital 
and liquidity requirements that support longer-term strategic 
plans. This assessment ensures that the Group will be able to 
continue in operation and meet the needs of its shareholders 
and other stakeholders, beyond a proposed dividend payout. 
Further details of this review can be found in the Viability 
Statement on page 29. 
Following a detailed review of the performance of the business 
and its future working capital requirements, the Board has 
concluded that the Group is unable to make a final dividend 
payment in respect of FY22. 
Capital structure 
Details of the authorised and issued share capital, together 
with details of any movements in the Company’s issued share 
capital during the year, are shown in Note 22. 
As at 26 February 2022, the Company had 134,431,518 
Ordinary Shares of 1 pence each in issue (2021: 132,530,539). 
The Company’s issued Ordinary Share capital comprises a 
single class of Ordinary Shares which carry no right to fixed 
income. The rights attached to the Ordinary Shares are set out 
in the Articles of Association. Each share carries the right to 
one vote at general meetings of the Company. 
The Directors present their report and 
audited consolidated financial statements for 
the year ended 26 February 2022 and up to 
the date of signing the financial statements. 
Financial Statements
Corporate Governance
Strategic Report
78
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

With regard to the appointment and replacement of Directors, 
the Company is governed by its Articles of Association, the 
Companies Act 2006 and related legislation. The Articles 
themselves may be amended by special resolution of the 
shareholders. The powers of Directors are described in the 
Main Board terms of reference, copies of which are available 
on request, and in the Corporate Governance Report on 
page 57. 
Going concern
The Directors have considered the appropriateness of 
adopting the going concern basis in preparing the financial 
statements. The quantum of the redress claims liability and 
timing of settlement, as well as the extension or deferral of 
the term-out clause and availability of funding beyond March 
2023 create a material uncertainty that may cast significant 
doubt about the Group’s and Company’s ability to continue 
as a going concern such that it may be unable to realise its 
assets and discharge its liabilities in the normal course of 
business. As explained on page 2, the financial statements 
have been prepared on a going concern basis, whilst noting the 
aforementioned material uncertainty. 
Information contained in other sections 
The Group’s principal risks and uncertainties, together with 
any emerging risks that are required to be included within 
the Report of the Directors, can be found within the Strategic 
Report on pages 24 to 29. 
The Group’s environmental policies and actions are contained 
in the Strategic Report on pages 41 to 43. 
Anti-bribery and corruption 
The corporate policies reflect the requirements of the Bribery 
Act 2010 and a corporate hospitality register is maintained 
using a risk-based approach. Although the risks for the Group 
arising from the Bribery Act 2010 continue to be assessed 
as low, all parts of the business are required to undergo 
appropriate training and instruction to ensure that they have 
effective anti-bribery and corruption policies and procedures 
in place. Every staff member receives regular and relevant 
training on bribery and corruption using the Group’s internal 
training system. Compliance is regularly monitored by the 
Executive Risk Committee and is subject to periodic review by 
the Group’s Internal Audit function. 
Whistle-blowing 
The Group has a very robust whistle-blowing policy and 
procedures. The Board monitors this on a regular basis through 
reports from the Risk & Compliance Committee. The Group has 
consistently highlighted to its staff the FCA’s whistle-blowing 
hotline as well as providing both an internal contact telephone 
number and email address, together with the contact details of 
one of our Independent Non-Executive Directors. The subject 
is included in online training courses which are mandatory for 
staff to complete and is also featured on staff screensavers 
and the staff intranet. There were no whistle-blowing reports 
during FY22 or during FY21. 
Directors’ and officers’ insurance 
The Group has throughout the year maintained directors’ and 
officers’ insurance for the benefit of the Group, the Directors 
and its officers. The Company also provides qualifying 
third-party indemnity arrangements for the benefit of all of 
its Directors in a form and a scope which comply with the 
requirements of the Companies Act 2006. 
Employees 
It is our policy to make adequate provision for the wellbeing, 
health and safety of our employees and self-employed agents. 
We are committed to offering equal opportunities for all 
employees, irrespective of age, gender, ethnicity, race, religion, 
belief, sexual orientation, disability, marital status and civil 
partnership. All employees are treated fairly and equally. 
Morses Club treats applications for employment from 
disabled persons in the same way as those from non-disabled 
applicants and selects on the basis of individual ability, 
experience and role requirements. Where existing employees 
become disabled, we endeavour to offer them continuing 
suitable work within the Group, offering retraining  
where necessary. 
We encourage our employees to engage with the development 
of our organisation. To promote this, the Chief Executive Officer 
and the Executive team publish regular updates on important 
or topical issues and highlight these via Teams meetings, 
informal briefings, videos and our intranet. 
The Group uses an online Learning Management System (LMS) 
to train and assess all employees and it can be easily accessed 
from any location, including at home. Everything from induction 
programmes, regulatory training modules and management 
development programmes are available on the LMS. 
All employees and self-employed agents undertake monthly 
regulatory training modules. These monthly modules are 
compulsory for all, and completion is monitored and reported 
at Board level. This ongoing training and assessment cycle 
ensures that our employees have the necessary skills to work in 
this highly regulated industry, providing great customer service 
and treating customers fairly. This has continued uninterrupted 
throughout the pandemic. As everyone was working from 
home, the LMS was used to communicate, support and 
train employees on skills relating to remote working, remote 
management, wellbeing and agile working. 
During 2021, we introduced a Management Development 
programme for all new and aspiring Managers which cover the 
core skills required for their role. The programme consists of a 
number of online modules supported by six online workshops 
and there are currently 42 Managers on the programme. 
Existing Managers are able to attend the core skills workshops 
in order to refresh their skills. 
79
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

With the focus on more short training interventions, we have 
partnered with Inrehearsal, a leading digital learning company 
that provides bite-size learning videos and made them 
available for all employees to use as and when needed. There 
are 377 employees who have registered with Inrehearsal and 
are accessing their training videos. 
To complement the monthly modules, there is also a 
programme of training supplied to all employees relating to 
cyber security and phishing. Bite-size videos and quizzes are 
supplied monthly, by email, covering topical subjects that 
help protect people online. This is backed up with a phishing 
subscription service that tests and trains employees specifically 
in relation to phishing. Supplied by one of our security partners, 
CMI, this enables us to track and understand the level of cyber 
security knowledge within the organisation. 
The Group offers a defined contribution pension scheme, 
matching employee contributions up to a maximum of 7% 
of salary. This rate is uniform throughout the whole Group, 
including its executives. 
The Group has had a Health & Safety Committee for many 
years. Its monthly reports are reviewed at each Board meeting. 
Prior to Covid-19, the Health & Safety Committee contained 
a significant number of representatives from our HCC field 
network. During lockdown, with everyone working remotely, 
these representatives did not come into contact with other 
employees on a daily basis. In order to keep in touch with 
all employees who are currently working from home, we 
have reconstituted the Committee, keeping a core of key 
functional representatives, removing field representatives and 
introducing new channels including regular employee surveys, 
Teams channels and other feedback mechanisms to ensure 
everyone is involved. The Health & Safety Committee has been 
monitoring, updating and communicating our approach to 
Covid-related restrictions based on the government guidance 
throughout the pandemic. 
Employee share schemes 
The Group first introduced an unapproved share option 
scheme on 19 October 2017 and awarded share options to 
all of its employees who had been employed for a minimum 
of 12 months at 1 October 2017. These shares vested in 
January 2021, following the announcement of the Company’s 
final FY20 and interim FY21 results in November 2020 and 
December 2020 respectively, and participants were able to 
purchase their Morses Club shares at the nominal price of  
1p each. 
In February 2018, Hay Wain Group Limited ceased to be 
a majority shareholder of the Company, and as a result, 
the Company was permitted to implement an HMRC tax 
advantaged plan for the first time. In November 2018, the 
Company created a new Share Incentive Plan (the SIP) which in 
2019 won an award from ProShare, the voice of the employee 
share ownership industry in the UK. In December 2018, 2019, 
and 2021, all eligible employees applied to participate in 
the SIP and each have been given shares in the Company 
representing approximately 3.25% of their salary (based on the 
average share price during the few days prior to the award). 
Due to the Group failing to meet its profit targets in FY20, no 
award was made to employees in December 2020. 
The free SIP shares are held in trust for a minimum holding 
period of three years, and employees who participate will 
lose their award if they resign or are dismissed from their 
employment during this three-year period. 
During the time that the shares are held in the Trust, 
employees receive dividends, so giving them a real stake in the 
business in which they work. 
Providing the Group achieves its profitability targets, the 
Group intends to continue to award shares under the SIP to its 
employees annually in future years. 
Employee engagement 
The Directors regard employee involvement as essential to the 
healthy development of the business. 
Please see pages 16 and 17 for further details about the 
Group’s employee engagement activities. 
SECR and energy efficiency 
Details of our reporting under the Streamlined Energy & 
Carbon Reporting (SECR) framework, and our energy efficiency 
initiatives, are included on page 41. 
Substantial interests in shares 
As at 29 July 2022, the Company had been notified of the 
following substantial interests of 3% or more in its Ordinary 
Shares:
Number of 
Shares
% Issued 
Capital
Hay Wain Group
46,762,986
34.79
Premier Miton Investors
16,406,536
12.20
J O Hambro Capital Management
10,329,359
7.68
Hargreaves Lansdown, stockbrokers
8,799,263
6.55
Interactive Investor
8,082,349
6.01
Janus Henderson Investors
5,695,763
4.24
Wood & Company Financial Services
4,300,000
3.20
Directors’ Report  
continued
Financial Statements
Corporate Governance
Strategic Report
80
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Relationship with our controlling shareholder 
As a result of the IPO on 5 May 2016, the shareholding of 
the controlling shareholder in the Company, Hay Wain Group 
Limited, reduced from 100% to 51%. 
On 21 February 2018, Hay Wain Group Limited sold 14.2% 
of the shares in the Company and at 26 February 2022 
continues to hold 34.79% of the shares in the Company. 
Hay Wain Group Limited has entered into a relationship 
agreement which contains provisions to ensure that, inter alia, 
there is no interference with the independent operation of the 
Board and that the Company’s transactions with Hay Wain 
Group Limited are effected at arm’s length and on a normal 
commercial basis. 
Hay Wain Group Limited can, subject to applicable laws and 
regulation, appoint one Director to the Board for as long as it 
holds more than 20% of the rights to vote at a General Meeting 
of the Company. The Director appointed under this right is 
Peter Ward. The Board confirms that, since the admission of 
the Company’s shares on to AIM, the Company has complied 
with the independence provisions included in the relationship 
agreement and that, so far as the Company is aware, Hay 
Wain Group Limited and its associates have also complied with 
such provisions. 
Political donations 
The Company made no political donations in 2022 (2021: £Nil). 
Post balance sheet events 
As announced on 22 December 2021, Stephen Karle retired as 
Chair on 28 February 2022, after seven years on the Board. 
On 31 March 2022, Joanne Lake stepped down from the 
Board as an Independent Non-Executive Director following the 
completion of her second three-year term of office as a Non-
Executive Director.
During the year, the Group made the decision to withdraw the 
e-money current account (U Account) and closed the resulting 
operational elements effective as at 3 May 2022.
Funding
During the period we extended the Group’s facility with the 
current lending consortium of £35m until 31 March 2023. 
Discussions continue with lenders regarding the future facility 
options, as well as other funding sources. We draw attention 
to note 1 in the financial statements, which indicates that the 
Group’s current facility of £35m expires on 31 March 2023. 
Discussions continue with lenders regarding the covenants 
within the facility, the extension or temporary deferral of 
the term-out clause which would be enacted by the end of 
September 2022 and would place restrictions on the ability 
of the Group to issue new loans and the facility’s possible 
extension. This term-out clause is pre-existing and essentially 
provides assurance to the funders of the repayment of the 
facility within the last 6 months of the agreed term. In practice, 
this has the effect of converting the rolling credit facility to a 
term loan. This would mean that any subsequent collections 
made on the loan book, would be ringfenced to pay down the 
facility, less any operational costs the business has. Therefore, 
it would place restrictions on the business with regard to the 
issue of new loans. Discussions with the lenders have already 
led to a temporary deferral of the testing of two covenants 
from August to September 2022, to allow time for further 
discussions. These two covenants are linked to profitability and, 
if tested, are likely to fall outside of covenant range. There has 
been no breach, nor waiver of covenants up until the date of 
the report. 
The Board recognises that as the current funding facility is 
in place for less than 12 months following the date of signing 
the Financial Statements there is also material uncertainty 
regarding secured funding.
Disclosure of information to the auditor 
The Directors confirm that: 
•	
so far as each Director is aware, the auditor is aware of all 
relevant audit information; and
•	
the Directors have taken all necessary steps that they 
ought to have taken as Directors in order to make 
themselves aware of any relevant audit information, and to 
establish that the auditor is aware of that information. 
This confirmation is given and should be interpreted in 
accordance with the provisions of s418 of the Companies  
Act 2006. 
Our auditor 
Deloitte LLP have notified the Company of their intent to 
stand down as external auditor. A new external auditor will be 
announced once appointed.
 
Notice of Annual General Meeting 
The notice convening the Annual General Meeting to be held 
at the premises of DWF Group at 20 Fenchurch St, London 
EC3M 3AG on 4 October 2022, together with an explanation 
of the resolutions to be proposed at the meeting, is contained 
on the Company’s website at www.morsesclubplc.com/
investors. Shareholders who wish to attend the AGM, in person 
or virtually, are asked to contact the Company in advance at 
investors@morsesclubplc.com. 
By order of the Board 
Dave Belmont 
Company Secretary 
25 August 2022
81
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Directors’ Responsibilities
Company law requires the Directors to prepare financial 
statements for each financial year. Under that law the 
Directors are required to prepare the Group financial 
statements in accordance with international accounting 
standards in conformity with the requirements of the 
Companies Act 2006. Under company law, the Directors must 
not approve the accounts unless they are satisfied that they 
give a true and fair view of the state of affairs of the Company 
and of the profit or loss of the Company for that period. In 
preparing these financial statements, International Accounting 
Standard 1 requires that Directors:
•	
properly select and apply accounting policies;
•	
present information, including accounting policies, in a 
manner that provides relevant, reliable, comparable and 
understandable information;
•	
provide additional disclosures when compliance with the 
specific requirements in IFRS are insufficient to enable 
users to understand the impact of particular transactions, 
other events and conditions on the entity’s financial position 
and financial performance; and
•	
make an assessment of the Company’s ability to continue 
as a going concern.
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at 
any time the financial position of the Company and enable 
them to ensure that the financial statements comply with 
the Companies Act 2006. They are also responsible for 
safeguarding the assets of the Company and hence for taking 
reasonable steps for the prevention and detection of fraud and 
other irregularities.
The Directors are responsible for the maintenance and 
integrity of the corporate and financial information included 
on the Company’s website. Legislation in the United Kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions.
Directors’ responsibility statement
We confirm that to the best of our knowledge:
a)	 the financial statements, prepared in accordance  
with International Financial Reporting Standards, give a 
true and fair view of the assets, liabilities, financial position 
and profit or loss of the Company and the undertakings 
included in the consolidation taken as a whole;
b)	 the Strategic Report includes a fair review of the 
development and performance of the business and the 
position of the Company and the undertakings included in 
the consolidation taken as a whole, together with  
a description of the principal risks and uncertainties that 
they face; and
c)	 the Annual Report and financial statements, taken as  
a whole, are fair, balanced and understandable and 
provide the information necessary for shareholders  
to assess the Company’s position and performance, 
business model and strategy.
This responsibility statement was approved by the Board of 
Directors on 25 August 2022 and is signed on its behalf by:
 
Gary Marshall
Director
25 August 2022
Graeme Campbell
Director
25 August 2022
The Directors are responsible for 
preparing the Annual Report and the 
financial statements in accordance 
with applicable law and regulations.
Financial Statements
Corporate Governance
Strategic Report
82
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Financial 
Statements
Contents
Financial Statements
84	
Independent Auditor’s Report
97	
Consolidated Income Statement
98	
Balance Sheet
99	
Consolidated Statements of Changes in Equity
100	 Cash Flow Statement
101	
Notes to the Consolidated Cash Flow Statements
103	 Notes to the Consolidated Financial Statements
150	 Morses Club PLC Information for Shareholders
83
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Independent Auditor’s Report
to the members of Morses Club PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
1.  OPINION
In our opinion:
•	
the financial statements of Morses Club PLC (the ‘parent company’) and its subsidiaries (the ‘group’) give a true and fair 
view of the state of the group’s and of the parent company’s affairs as at 26 February 2022 and of the group’s loss for the 
year then ended;
•	
the group financial statements have been properly prepared in accordance with United Kingdom adopted international 
accounting standards; 
•	
the parent company financial statements have been properly prepared in accordance with United Kingdom adopted 
international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
•	
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
•	
the consolidated income statement;
•	
the consolidated and Parent Company balance sheets;
•	
the consolidated and Parent Company statements of changes in equity;
•	
the consolidated and Parent Company cash flow statements; and
•	
the related Notes 1 to 30.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted 
international accounting standards and, as regards the parent company financial statements, as applied in accordance with  
the provisions of the Companies Act 2006.
2.  BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.  
Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial 
statements’ section of our report. 
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our 
audit of the financial statements in the UK, including the Financial Reporting Council’s (the FRC’s) Ethical Standard as applied to 
listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3.  MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
We draw attention to note 1 in the financial statements, which indicates the material uncertainty due to quantum and timing of 
unaffordable lending redress potentially payable to customers, and in respect of the extension or deferral of the term-out clause 
and availability of funding past the current formal facility end date of 31 March 2023. 
The Group’s current facility of £35m is in place until 31 March 2023 supported by a funding consortium of two existing providers. 
Discussions continue with lenders regarding the covenants within the facility, the extension or deferral of the term-out clause 
and the facility possible extension. Note 1 in the financial statements sets out the impact of the term-out clause on the business, 
including with regard to obtaining new loans. Discussions with the lenders have already led to a temporary deferral of the testing 
of two covenants from August to September 2022, to allow time for further discussions with the lenders. These two covenants 
are linked to profitability and, if tested, are likely to fall outside of covenant range. The Board recognises that the current funding 
facility is in place for less than 12 months following the date of signing the Financial Statements.
In assessing the Group’s going concern status the Directors produced a number of forecast scenarios, all of which include a 
requirement for funding in line with the current agreement with lenders, such that the term-out clause is not triggered and any 
future covenant testing can be met. The forecast on which the Directors are basing its going concern assessment includes an 
assumption that the settlement of the complaints provision (“Redress Claims”) occurs in an orderly manner over a period of time 
and that complaints do not remain at recent peak levels. If complaints volumes are higher than this level then this will accelerate 
the settlement of the Redress Claims liability and will therefore have a detrimental impact on liquidity. The timing of the settlement 
of the Redress Claims liability is key to the going concern assessment of the Group. 
As stated in Note 1, these events or conditions, along with the other matters as set forth in Note 1 to the financial statements, 
indicate that a material uncertainty exists that may cast significant doubt on the Group’s and the Company’s ability to continue as 
a going concern. Our opinion is not modified in respect of this matter. 
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In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the 
preparation of the financial statements is appropriate, notwithstanding this material uncertainty. 
Our evaluation of the Directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern 
basis of accounting included the following procedures:
•	
Assessed the feasibility of the Directors’ scenarios and proposed mitigating actions through working with our internal 
restructuring specialists to assist in our challenge of management’s plans and holding discussions with management’s  
third-party advisers;
•	
Assessed and challenged the relevance and reliability of the underlying data and the assumptions on which the assessment is 
based, including consistency with related assumptions used in other areas;
•	
Evaluated the Directors’ latest covenant compliance forecasts up to the date of signing our audit opinion;
•	
Evaluated plans for future actions, with a focus on how the group is managing relationships with existing lenders and 
stakeholders, including the Financial Conduct Authority (“FCA”);
•	
Evaluated and challenged whether events or conditions give rise to a risk of management bias in the preparation of the 
financial statements, specifically considering the treatment of customer complaints, ability to secure funding, and potential 
future breach of covenants on the borrowing facility;
•	
Reviewed Audit Committee meeting minutes and regulatory correspondence, considering the impact of any open 
regulatory matters;
•	
Performed a stand-back assessment to consider all relevant audit evidence obtained, whether corroborative or 
contradictory; and
•	
Considered and challenged whether the disclosures are appropriate in the context of the applicable financial reporting 
framework.
In relation to the reporting on how the group has applied the UK Corporate Governance Code, we have nothing material to add or 
draw attention to in relation to:
•	
the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going 
concern basis of accounting; and
•	
the directors’ identification in the financial statements of the material uncertainty related to the group’s and parent company’s 
ability to continue as a going concern over a period of at least twelve months from the date of approval of the financial 
statements.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of 
this report.
4.  SUMMARY OF OUR AUDIT APPROACH
Key audit matters
The key audit matters that we identified in the current year were:
•	
Going concern (see material uncertainty related to going concern section);
•	
Loan impairment provisions (HCC and Digital);
•	
Revenue recognition; and
•	
Complaints provision.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used for the Group financial statements was £670,000 which was 
determined on the basis of 0.66% of total assets (2021: 1% of net assets).
We revised the benchmark applied in the current year to total assets as it is a key focus area for a 
number of stakeholders, it is considered to be a more stable base compared to net assets in light of 
the significant increase in complaints provisions, and furthermore it is also capable of being applied 
consistently in future periods. 
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to the members of Morses Club PLC continued
Scoping
The Group is made up of Morses Club PLC which is the main trading entity and its four subsidiaries 
being Shopacheck Financial Services Limited, Shelby Finance Limited, U Holdings Limited and U 
Accounts Limited.
Our full audit scope covered 100% of revenue, 100% of loss before tax and 100% of net assets across 
the Group.
Significant changes 
in our approach
In the prior year, we identified a key audit matter around the impact of the volume of complaints 
on the Group’s contingent liabilities, due to the noticeable increase in complaints raised by claims 
management companies (‘CMC’s’) within both the Group and the wider home collect credit industry. 
In the current year, this key audit matter has been revised as management has now observed a 
discernible trend in the upheld complaints and based on this has recognised an additional provision 
of £39.1m in the current year. Our key audit matter is now focused on the complaints provision 
recorded by management to account for potential future claims from customers, rather than the 
consideration of a contingent liability which is where our key audit matter was focused in the prior 
year.
We have expanded our key audit matter regarding loan impairment provisioning in the current year 
as management has updated its Digital IFRS 9 impairment methodology and modelling approach. 
The new methodology is more complex, with management having determined different customer 
behavioural data points i.e., nodes, based on a combination of predictive variables, and each 
customer being assigned a node to determine the level of impairment provision to be recorded. We 
are expanding our key audit matter to capture the determination of the respective nodes given this 
requires significant management judgement.
We have removed our key audit matter on impairment of goodwill within the Digital division, having 
previously been focussed on the forecast cash flows in the goodwill impairment model, in particular 
the growth rates and discount rate used. We have observed a significant increase in the size of the 
Digital loan book and credit issued during the year with actual loan volumes exceeding the break-
even point identified in the underlying goodwill impairment calculations. We, alongside our valuation 
specialists, also expected the discount rate to reduce this year thereby providing more headroom 
than shown in management’s goodwill impairment calculations. As such, this risk has reduced in the 
current year and is not considered to be a key audit matter. 
5.  KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial 
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to 
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation 
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion 
thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the material 
uncertainty related to going concern section, we have determined the matters described below to be the key audit matters  
to be communicated in our report.
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5.1. Loan impairment provisions (HCC and Digital) 
Key audit matter 
description
The Group held loan impairment provisions of £30.7m (2021: £32.6m), against gross loan carrying amounts of 
£74.3m (2021: £80.5m) within the home collect credit (“HCC”) business, and loan impairment provisions of £6.5m 
(2021: £4.0m), against gross loan carrying amounts of £18.8m (2021: £9.6m) within the Digital business.
HCC
Amounts receivable from customers are valued using collections curves to estimate the twelve month and 
lifetime expected future losses on cohorts of loans exhibiting similar risk characteristics, including the number 
of missed payments in the previous 13 weeks. These collections curves are based on collections levels from 
outstanding amounts receivable from customers over 2016-2020. The collection curve methodology has not 
changed since prior year with cohort weightings applied to give more prominence (60%) to the most recent 2020 
cohort, encapsulating the Covid-19 performance of the loan book, and 10% for each of the four previous cohorts. 
We have determined our key audit matter to be the estimation of future cash flows, including cohort weightings, 
used to determine the provision given that the impairment provision is highly sensitive to this assumption and it 
requires the highest degree of judgement.
Digital
Management has updated its Digital IFRS 9 impairment methodology and modelling approach since the prior 
year. A relatively simplistic approach has previously been applied due to the Digital business being in its infancy 
and growth being lower than anticipated, however the new methodology is more complex. Management has 
determined different nodes which are based on a combination of predictive variables including loan term, number 
of previous loans taken by a customer, past due status and credit scoring. Each customer is assigned a particular 
node and based on this assignment management will then apply probability of default, exposure at default, loss 
given default and time to default assumptions to determine individual impairment provisions.
We have identified a key audit matter around the determination of the respective nodes, given this component of 
the methodology requires the highest degree of judgement. We have also focused on recency weightings applied, 
including any inconsistency with the HCC loan loss provisioning methodology.
Given the degree of judgement involved in determining key assumptions, we also identified that there is a 
potential for fraud through possible manipulation of this balance.
The modelling approach taken by management is partly automated, in relation to the extraction of loan data 
from the lending system and the application of provisioning rates to loan balances.
Management’s associated accounting policies are detailed on pages 103 to 113 with detail about judgements in 
applying accounting policies and critical accounting estimates on page 111 and within the Audit Committee Report 
on pages 62 to 68. The trade and other receivables note is on page 125.
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5.1. Loan impairment provisions (HCC and Digital) 
How the scope of our 
audit responded to the 
key audit matter
We obtained an understanding of the relevant controls over the estimation of future cash flows, the 
determination of nodes and management’s judgement paper. 
HCC
We specifically challenged the appropriateness of the cash collection curves used to determine the HCC 
impairment provision, which included a review of the methodology used to construct the curves and involving our 
IT specialists to independently reconstruct the curves.
We worked with our IT specialists to test the mechanical accuracy and completeness of the impairment models 
by recalculating the provision in accordance with the approved provisioning policy.
Digital
We worked with our credit risk specialists to review and challenge management’s Digital impairment provisioning 
methodology, assess compliance with the technical requirements of IFRS 9, and ensure the enhanced complexity 
is appropriately reflected through the detailed modelling which underpins the methodology.
We assessed for any indicators of management bias given the new methodology results in lower impairment 
provisions when compared to the previous methodology.
As part of our broader procedures around the key audit matters, we performed the following:
•	 We involved internal IT specialists to review the methods used by management to extract loan data from the 
lending system. Additionally, we assessed the application of the provisioning rates to the loan balances within 
the loan impairment provisioning model. 
•	 We assessed whether the historic collections data being used by management were an appropriate basis 
upon which to predict future recoveries in the current economic environment. 
•	 We performed a retrospective review comparing forecasted cash collections for FY22 against actual cash 
collections, including an assessment of the impact of any differences on the validity of management’s 
modelling.
•	 We challenged the defined staging triggers as these are the other key assumptions driving the impairment 
calculation. This involved analysis of the Group’s historical cash collection experience and benchmarking to 
peers and external economic and industry data.
•	 We reconciled the loan impairment provision to the general ledger, assessed compliance of the modelling 
approach and provisioning policy with the requirements of IFRS 9 and tested a sample of loans back to 
signed source documentation to assess whether the data used in the provision calculation was complete and 
accurate.
•	 We assessed the completeness of management overlays considering relevant macro-economic factors, 
in particular the current events surrounding the cost of living crisis and rising inflation. We challenged 
management’s assessment regarding a retrospective application of current affordability rules, which have 
been adjusted for the expected impacts associated to the cost of living crisis, to identify any customers that 
may be at a heightened risk of impairment and therefore could represent a significant increase in credit risk as 
at the balance sheet date, noting no material potential impact.
Key observations
We concluded that the impairment models were working as intended.
We concluded that the estimation of future cash flows within the HCC model was reasonable and thus the 
impairment provision recorded was appropriate.
We concluded that the methodology for determining nodes within the Digital model was reasonable and 
thus the impairment provision recorded was appropriate.
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5.2. Revenue recognition 
Key audit matter 
description
The Group recognised revenue of £81.8m (2021: £86.4m) against amounts receivable from HCC customers 
during the year ended 26 February 2022. 
The recognition of revenue on amounts receivable from customers under IFRS 9 requires the use of an effective 
interest rate method. Judgement is applied by management to determine key assumptions related to the 
expected lives of loans.
We have determined our key audit matter to be the formulation of the expected lives assumptions, including 
cohort weightings, given these are the key judgements underpinning the calculation of the revenue balance. The 
expected lives are determined from the same data set used to construct the cash collection curves used in loan 
impairment provisioning.
Given the degree of judgement involved in determining key assumptions, we also identified that there is a 
potential for fraud through possible manipulation of this balance.
The modelling approach taken by management is partly automated, in relation to the extraction of loan data 
from the lending system and the application of expected lives to the revenue balance
Management’s associated accounting policies are detailed on pages 103 to 113 with detail about judgements in 
applying accounting policies and critical accounting estimates on page 111 and within the Audit Committee Report 
on pages 62 to 68. The segment reporting note which shows revenue per division is on page 115.
How the scope of our 
audit responded to the 
key audit matter
We obtained an understanding of the relevant controls over the determination of the expected lives and 
management’s judgement paper. 
We involved internal IT specialists to review the methods used by management to extract loan data from the 
lending system.
We involved our IT specialists to independently reconstruct the expected lives using historical data and then 
challenged the lives by reference to both historical and forecast data and comparability with the contractual life 
under IFRS 9.
We tested the mechanical accuracy and completeness of the revenue recognition models by agreeing a sample 
of model inputs back to underlying source data.
We recalculated the effective interest rates for each type of product and independently determined for a sample 
of customers the accuracy of the revenue earned during the year ended 26 February 2022.
Key observations
We concluded that the revenue recognition models were working as intended.
The underlying assumptions applied within the models, specifically in respect of the expected lives used in the 
calculation of the revenue balance, were found to be reasonable.
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to the members of Morses Club PLC continued
5.3. Complaints provision 
Key audit matter 
description
The group has provided for £41.9m (2021: £2m) for customer complaints as disclosed in note 29. Due to the 
sustained volume of complaints relating to unaffordable lending raised by Claims Management Companies 
(“CMC’s”) within both the Group and the wider home collect credit industry, the directors have now recognised an 
additional provision of £39.1m in the current year.  
Under the requirements of IAS 37, a provision should be recognised for a present obligation that arises from past 
events, where the likelihood of economic outflow is probable, and where the quantum can be reliably measured. In 
the current year, the directors have identified a discernible trend in the upheld complaints and based on this has 
recognised a liability for the full cost of settling the complaints in relation to all affected lending from the date of 
transfer of the consumer credit regulation to the FCA as a guide timeline up to the balance sheet date estimated 
at a gross redress of £112m for customers who are eligible to be redressed at an estimated take up rate of 40%. 
Our key audit matter in the current year is focussed on the accuracy and completeness of the key assumptions 
used by management, namely the gross redress exposure and the level of take-up from eligible customers, to 
derive the complaints provision. 
The provision represents a key source of estimation uncertainty, with a range of outcomes as disclosed in Note 
1, due to the fact that there is significant uncertainty regarding management’s estimate of the exact quantum 
of the gross redress exposure and the level of take-up from eligible customers and a different methodology or 
assumptions could subsequently be adopted based on ongoing discussions with the FCA and ultimately through 
approval at the UK Courts should the proposed scheme of arrangement proceed. Given the degree of judgement 
involved, we also identified that there is a potential for fraud through manipulation of this balance.
Management’s associated accounting policies are detailed on pages 103 to 113 with detail about judgements in 
applying accounting policies and critical accounting estimates on page 111 and within the Audit Committee report 
on pages 62 to 68. The provisions note is on page 112.
How the scope of our 
audit responded to  
the key audit matter
We obtained an understanding of the relevant control over management’s judgement paper including the 
methodology used for calculating the provision.
We assessed the trend in complaints observed during the year and up until the date of signing and evaluated 
the level of complaints raised in comparison to that observed at peers using publicly available information. 
We assessed whether the requirements of IAS 37 have been applied appropriately in recognition of the 
provision by determining that the origination of the loans rather than receipt of a complaint represents a 
present obligation that arises from past events and now management has identified a discernible trend in  
the upheld complaints the likelihood of an economic outflow is both probable and can be reliability estimated.
We involved our regulatory specialists to assess any additional areas of concern or risk based on complaints 
received to date, to review and challenge management’s proposed methodology for determining the potential 
gross redress exposure to future claims and to review any correspondence with regulators. In addition, we 
tested the accuracy and completeness of management’s analysis which has been used to determine customer 
eligibility for the gross redress exposure. 
We challenged the level of take-up from eligible customers within management’s proposed methodology by 
reference to publicly available data regarding other customer redress programmes and considering the  
current macroeconomic environment in particular the current events surrounding the cost of living crisis  
and rising inflation.
We held discussions with the FCA and management’s third-party advisers regarding developments with the 
potential scheme of arrangement, being the proposed mechanism for settling the complaints provision.
We assessed the associated disclosures within the financial statements for the key sources of estimation 
uncertainty alongside the detailed explanation of how management has derived the estimate.
Key observations
While we note the significant estimation uncertainty we consider, the methodology, underlying assumptions and 
data applied to determine the complaints provision, based on information available up until the reporting date, to 
be reasonable. 
We have considered the disclosures within the financial statements in relation to how management has derived 
the provision, including the related sensitivity analysis to be appropriate. 
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Total assets 
£101,627k
Total assets
Group materiality
Group materiality
£670k
Component 
materiality range 
£637k to £335k
Audit Committee 
reporting threshold 
£34k
6.  OUR APPLICATION OF MATERIALITY
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic 
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope 
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent Company financial statements
Materiality
£670k (2021: £724k)
£637k (2021: £636k)
Basis for determining 
materiality
0.66% of total assets (2021: 1% of net assets) 
0.66% of total assets (2021: 1% of net assets) 
We have capped the Parent Company materiality 
at 95% of the Group materiality, consistent with the 
approach taken in the prior year.
Rationale for the 
benchmark applied
We initially considered net assets as the benchmark for determining materiality. However, we revised the 
benchmark applied in the current year to total assets as it is a key focus area for a number of stakeholders, 
it is considered to be a more stable base compared to net assets in light of the significant increase in 
complaints provisions, and furthermore it is also capable of being applied consistently in future periods. 
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6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and 
undetected misstatements exceed the materiality for the financial statements as a whole. 
Group financial statements
Parent Company financial statements
Performance materiality
70% (2021: 65%) of Group materiality
70% (2021: 65%) of Parent Company materiality 
Basis and rationale for 
determining performance 
materiality
We set performance materiality at a lower level than materiality to reduce the probability that, in 
aggregate, uncorrected and undetected misstatements exceed the materiality for the financial 
statements as a whole. Performance materiality was set at 70% of materiality for the 2022 audit 
(2021: 65%). We reduced performance materiality in the prior year to reflect the increased control 
risks inherent within the business given it was operating in a Covid 19 environment. While these risks 
are still present, we did not identify any control observations in the prior year audit as a direct result 
of Covid 19 and have determined to increase our performance materiality to 70%. In addition, we 
considered our risk assessment, including the level of misstatements identified in the previous period 
audit and the group and parent company’s control environment and our ability to rely on controls. 
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £34k (2021: £36k), 
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the 
Audit Committee on disclosure matters that we identify when assessing the overall presentation of the financial statements.
7.  AN OVERVIEW OF THE SCOPE OF OUR AUDIT
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and 
assessing the risks of material misstatement at the Group level.
The Group is made up of the main trading and parent entity of Morses Club PLC and four subsidiaries being Shopacheck Financial 
Services Limited, Shelby Finance Limited, U Holdings Limited and U Accounts Limited. These companies account for 100% of the 
Group’s net assets, 100% of the Group’s revenue and 100% of the Group’s pre-tax loss; this is consistent with the approach in the 
prior year. We performed testing over the consolidation which is prepared at the Group level only.
All entities in the Group are within our full audit scope and the audit procedures for these entities are performed directly by the 
Group audit team.
7.2. Our consideration of the control environment
We identified key IT systems for the Group in respect of the financial reporting system and lending system. With the involvement of 
our IT specialist we performed testing of the general IT controls (GITCs) associated with these systems and relied upon IT controls 
across the systems identified. 
We adopted a controls reliance approach in relation to the lending business cycle within the home collect credit business. We 
tested the relevant automated and manual controls for the business cycle where a control reliance approach was planned.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its financial 
statements. The Group continues to develop its assessment of the potential impacts of environmental, social and governance 
(ESG) related risks, including climate change, as outlined on page 41.
As a part of our audit, we have held discussions with management to understand the process of identifying climate-related risks, 
the determination of mitigating actions and the impact on the Company’s financial statements. 
We performed our own risk assessment of the potential impact of climate change on the Group’s account balances and classes 
of transactions and did not identify any additional risks of material misstatement.
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8.  OTHER INFORMATION
The other information comprises the information included in the Annual Report, other than the financial statements and our 
auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated 
in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially 
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be 
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives 
rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude 
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9.  RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the 
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors 
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether 
due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability 
to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of 
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no 
realistic alternative but to do so.
10.  AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material 
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance 
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a 
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually 
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these 
financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:  
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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11.  EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, 
INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our 
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which 
our procedures are capable of detecting irregularities, including fraud is detailed below. 
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with 
laws and regulations, we considered the following:
•	
the nature of the industry and sector, control environment and business performance including the design of the Group’s 
remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
•	
results of our enquiries of management and the Audit Committee about their own identification and assessment of the risks of 
irregularities; 
•	
any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating 
to:
•	
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of  
non-compliance;
•	
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
•	
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
•	
the matters discussed among the audit engagement team and relevant internal specialists, including tax, credit risk, 
regulatory, restructuring, valuations, IT, and analytics specialists regarding how and where fraud might occur in the financial 
statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud 
and identified the greatest potential for fraud in the following areas: loan impairment provisioning, revenue recognition and the 
complaints provision. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond 
to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions 
of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial 
statements. The key laws and regulations we considered in this context included the UK Companies Act 2006 and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements 
but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included 
the regulation set by the FCA, which are fundamental to the Group’s ability to continue as a going concern. 
Financial Statements
Corporate Governance
Strategic Report
94
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

11.2.  Audit response to risks identified
As a result of performing the above, we identified loan impairment provisioning, revenue recognition and the complaints provision 
as key audit matters related to the potential risk of fraud. The ‘Key audit matters, section of our report explains the matters in 
more detail and also describes the specific procedures we performed in response to those key audit matters. 
In addition to the above, our procedures to respond to risks identified included the following:
•	
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions 
of relevant laws and regulations described as having a direct effect on the financial statements;
•	
enquiring of management and the Audit Committee concerning actual and potential litigation and claims;
•	
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material 
misstatement due to fraud;
•	
reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing 
correspondence with the Financial Conduct Authority and HMRC; and
•	
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and 
other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential 
bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of 
business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members 
including internal specialists and remained alert to any indications of fraud or non-compliance with laws and regulations 
throughout the audit.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
12.  OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
•	
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial 
statements are prepared is consistent with the financial statements; and
•	
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the 
course of the audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
13.  CORPORATE GOVERNANCE STATEMENT
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate 
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit: 
•	
the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any 
material uncertainties identified;
•	
the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the 
period is appropriate;
•	
the Directors’ statement on fair, balanced and understandable reporting;
•	
the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks;
•	
the section of the Annual Report that describes the review of effectiveness of risk management and internal control 
systems; and
•	
the section describing the work of the Audit Committee.
95
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

14.  OPINION ON OTHER MATTER PRESCRIBED BY OUR ENGAGEMENT LETTER
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with  
the provisions of the Companies Act 2006 that would have applied were the Company a quoted company.
15.  MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
15.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•	
we have not received all the information and explanations we require for our audit; or
•	
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been 
received from branches not visited by us; or
•	
the Parent Company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15.2.  Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have 
not been made.
We have nothing to report in respect of this matter.
16.  USE OF OUR REPORT
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to 
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for 
the opinions we have formed.
KIEREN COOPER (SENIOR STATUTORY AUDITOR)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
25 August 2022
Independent Auditor’s Report
to the members of Morses Club PLC continued
Financial Statements
Corporate Governance
Strategic Report
96
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Consolidated Income Statement
For the 52-week period ended 26 February 2022
Notes
52 weeks ended 
26.02.22
£’000
52 weeks ended 
27.02.21
£’000
Revenue
111,396 
100,234 
Impairment of financial assets
(35,960)
(20,794)
Cost of sales
(15,406)
(20,657)
Gross profit
60,030 
58,783 
Administration expenses
2 & 4 
(100,901)
(55,967)
Operating profit before amortisation of intangibles and exceptional items
6,095 
3,161 
Amortisation of acquisition intangibles
12
(187)
(345)
Exceptional items
  Complaints liability
(42,640)
 –
  Corporate restructuring costs
(1,759)
 –
  U Accounts closure costs
(2,380)
 –
Exceptional items total
3 
(46,779)
 – 
Operating (loss)/profit
(40,871)
2,816 
Finance costs
6 
(1,985)
(2,360)
(Loss)/profit before taxation
4 
(42,856)
456 
Tax on profit on ordinary activities
7 
9,489
(239)
(Loss)/profit after taxation 
(33,367)
217 
Earnings per share
26.02.22 
Pence
27.02.21 
Pence
Basic
9
(25.03)
0.17
Diluted
9
(25.03)
0.17
All results derive from continuing operations. A Statement of Comprehensive Income is not included as there are no other gains or 
losses, other than those presented in the Income Statement.
97
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Balance Sheet
As at 26 February 2022
Notes
Group
Company
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Assets
Non-current assets
Goodwill
11
12,854 
12,854 
3,293 
3,293 
Other intangible assets
12
8,514 
8,863 
6,264 
5,092 
Investment in subsidiaries
14
– 
–
31,011 
23,011 
Property, plant & equipment
13
689
734 
134 
129 
Right-of-use assets
15
1,739
1,696 
1,217 
1,113 
Deferred tax 
21
9,112 
581 
8,442
671 
Amounts receivable from customers
16
2,633 
82 
–
–
35,541 
24,810 
50,361 
33,309 
Current assets
Amounts receivable from customers
16
53,214 
53,408 
43,626 
47,952 
Taxation receivable
16
2,790 
1,387 
2,596 
1,387 
Other receivables
16
3,903 
4,927 
27,867 
23,900 
Cash at bank
6,179 
8,258 
4,689 
6,616 
66,086 
67,980 
78,778 
79,855 
Total assets
101,627 
92,790 
129,139 
113,164 
Liabilities
Current liabilities
Trade and other payables
17
(6,401)
(10,039)
(6,122)
(9,858)
Complaints provision and liability
29
(20,237)
(2,012)
(20,237)
(2,012)
Lease liabilities
19
(778)
(790)
(721)
(740)
(27,416)
(12,841)
(27,080)
(12,610)
Non-current liabilities
 
 
Bank and other borrowings
18
(19,226)
(8,302)
(19,226)
(8,302)
Complaints provision and liability
29
(21,692)
–
(21,692)
–
Lease liabilities
19
(1,063)
(994)
(469)
(343)
(41,981)
(9,296)
(41,387)
(8,645)
Total liabilities
(69,397)
(22,137)
(68,467)
(21,255)
Net assets
32,230 
70,653 
60,672 
91,909 
Equity
Called up share capital
22
1,344 
1,325 
1,344 
1,325 
Group reconstruction reserve
23
–
–
(9,276)
(9,276)
Retained earnings
23
30,886 
69,328 
68,604 
99,860 
Total equity
32,230 
70,653 
60,672 
91,909 
The Parent Company’s loss for the financial period was £26,180,550 (2021 profit: £11,531,489). The consolidated and Company 
financial statements of Morses Club PLC were approved by the Board of Directors on 25 August 2022. 
As permitted by Section 408 of the Companies Act 2006, the income statement of the Parent Company is not presented as part 
of these financial statements. 
Signed on behalf of the Board of Directors
GARY MARSHALL 	
	
GRAEME CAMPBELL
Director	
	
	
Director
Financial Statements
Corporate Governance
Strategic Report
98
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Consolidated Statements of Changes in Equity
For the 52-week period ended 26 February 2022
Group
Notes
Called Up  
Share Capital
£’000
Retained 
Earnings
£’000
Total  
Equity
£’000
As at 29 February 2020
 1,312 
 69,343 
 70,655 
Profit for year
–
 218 
 9,477 
Total comprehensive income for the period
 – 
 218 
 218 
Share issue
 13 
–
 13 
Share-based payments charge
27 
 – 
 1,079 
 1,079 
Dividends paid
8 
–
 (1,312)
 (1,312)
As at 27 February 2021
 1,325 
 69,328 
 70,653 
Loss for year
–
 (33,367)
 (33,367)
Total comprehensive loss for the period
–
 (33,367)
 (33,367)
Share issue
 19 
–
 19 
Share-based payments charge
27
–
 242 
 242 
Dividends paid
8 
–
 (5,317)
 (5,317)
As at 26 February 2022
 1,344 
 30,886 
 32,230 
The Group has retained earnings of £30.9m which are made up of distributable reserves of £30.6m and a non-distributable 
share-based payment reserve of £0.3m.
Company
Notes
Called Up  
Share Capital
£’000
Group 
Reconstruction 
Reserve
£’000
Retained 
Earnings
£’000
Total
Equity 
£’000
As at 29 February 2020
 1,312 
(9,276)
 88,562 
 80,598 
Profit for year
–
–
 11,531 
 11,531 
Total comprehensive income for the period
–
–
 11,531 
 11,531 
Share issue
13
–
–
 13 
Share-based payments charge
27
–
–
 1,079 
 1,079 
Dividends paid
8
–
–
 (1,312)
 (1,312)
As at 27 February 2021
1,325
(9,276)
 99,860 
 91,909 
Loss for year
–
–
 (26,181)
 (26,181)
Total comprehensive loss for the period
–
–
 (26,181)
 (26,181)
Share issue
19
–
–
 19 
Share-based payments charge
27
–
–
 242 
 242 
Dividends paid
8
–
–
 (5,317)
 (5,317)
As at 26 February 2022
1,344
(9,276)
 68,604 
 60,672 
99
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Cash Flow Statement
For the 52-week period ended 26 February 2022
Group
Company
Notes
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Net cash (outflow)/ inflow from operating activities
1
(819)
33,054
6,052
40,071
Cash flows used in financing activities
Dividends paid
8
(5,317)
(1,312)
(5,317)
(1,312)
Proceeds from additional long-term debt
25,100
11,500
25,100
11,500
Repayment of long-term debt
 (14,200)
(37,000)
 (14,200)
(37,000)
Principal paid under lease liabilities
(943)
(1,499)
(893)
(1,435)
Interest received
–
–
-
1,544
Interest paid
(1,398)
(1,622)
(1,398)
(1,622)
Interest paid (lease liabilities)
(222)
(353)
(128)
(251)
Net cash inflow/(outflow) from financing activities
3,020
(30,286)
3,164
(28,576)
Cash flows used in investing activities
Purchase of intangibles
(4,074)
(5,282)
(3,059)
(1,625)
Purchase of property, plant and equipment
(206)
(1,096)
(85)
(839)
Additional investment in subsidiary
–
–
(8,000)
(12,000)
Net cash outflow from investing activities
(4,280)
(6,378)
(11,144)
(14,464)
Decrease in cash and cash equivalents
(2,079)
(3,610)
(1,928)
(2,969)
Reconciliation of increase in cash and cash equivalents
Movement in cash and cash equivalents in the period
(2,079)
(3,610)
(1,928)
(2,969)
Cash and cash equivalents, beginning of year
8,258
11,868
6,617
9,585
Cash and cash equivalents, end of year
6,179
8,258
4,689
6,616
Financial Statements
Corporate Governance
Strategic Report
100
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Notes to the Consolidated Cash Flow Statements
For the 52-week period ended 26 February 2022
1.	
RECONCILIATION OF PROFIT BEFORE TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES 
Group
Company
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Profit before tax and exceptional items
 3,923 
 456 
 9,490 
 11,818 
Exceptional costs
 (46,779)
–
 (44,398)
–
(Loss)/profit before taxation
 (42,856)
 456 
 (34,908)
 11,818 
Interest received included in financing activities
–
–
 (488)
 (1,544)
Interest paid included in financing activities
 1,577 
 2,006 
 1,483 
 1,904 
Share issue
 19 
 13 
 19 
 13 
Depreciation charges
 1,211 
 1,915 
 963 
 1,646 
Share-based payments charge
 242 
 1,079 
 242 
 1,079 
Impairment of goodwill
 –
 126 
–
–
Amortisation of intangibles
 2,565 
 2,811 
 1,713 
 2,139 
Write off of right-of-use assets
 108 
 261 
 108 
 261 
Loss on disposal of tangible assets
–
 92 
–
–
Loss on disposal of intangible assets
 1,857 
 969 
 173 
–
(Increase)/decrease in debtors
 (1,333)
 18,667 
871
 18,186 
Increase in creditors 
 35,791 
 5,849 
 35,876 
 5,759 
 42,037 
 33,788 
 40,960 
 29,443 
Taxation paid
–
(1,190)
–
(1,190)
Net cash (outflow)/ inflow from operating activities
(819)
33,054
6,052
40,071
101
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

2.	
RECONCILIATION OF LIABILITIES ARISING FROM FINANCIAL ACTIVITIES
Group
Long-term
Borrowings
£’000
Lease
Liabilities
£’000
Total
£’000
At 29 February 2020
33,838
2,839
36,677
Non-cash changes:
– Amortised fees
(36)
–
(36)
– Interest
(1,622)
(353)
(1,975)
Cash flows:
– Repayments
(37,000)
(1,499)
(38,499)
– Drawdown
11,500 
–
11,500 
– Lease additions & disposals
–
444
444
– Interest
1,622 
353
1,975
At 27 February 2021
8,302
1,784
10,087
Non-cash changes:
– Amortised fees
24
–
24
– Lease additions & disposals	
1,000
1,000
– Interest
1,398
222
1,620
Cash flows:
– Repayments
(14,200)
(943)
(15,143)
– Drawdown
25,100
–
25,100
– Interest
(1,398)
(222)
(1,620)
At 26 February 2022
19,226 
1,841
21,068
Company
Long-term
Borrowings
£’000
Lease
Liabilities
£’000
Total
£’000
At 29 February 2020
33,838
2,076
35,914
Non-cash changes:
– Amortised fees
(36)
–
(36)
– Interest
(1,622)
(251)
(1,873)
Cash flows:
– Repayments
(37,000)
(1,435)
(38,435)
– Drawdown
11,500
–
11,500
– Lease additions & disposals
–
442
442
– Interest
1,622
251
1,873
At 27 February 2021
8,302
1,083
9,385
Non-cash changes:
– Amortised fees
24
–
24
– Lease additions & disposals	
–
1,000
1,000
– Interest
1,398
128
1,526
Cash flows:
– Repayments
(14,200)
(893)
(15,093)
– Drawdown
25,100
–
25,100
– Interest	
(1,398)
(128)
(1,526)
At 26 February 2022
19,226 
1,190
20,417
Notes to the Consolidated Cash Flow Statements continued
For the 52-week period ended 26 February 2022
Financial Statements
Corporate Governance
Strategic Report
102
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Notes to the Consolidated Financial Statements
1. ACCOUNTING POLICIES 
General information 
The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is Building 1, 
The Phoenix Centre, 1 Colliers Way, Nottingham, NG8 6AT. 
Basis of preparation 
The financial statements have been prepared in accordance with international accounting standards in conformity with the 
requirements of the Companies Act 2006. The financial statements have been prepared on a going concern basis under the 
historical cost convention. In preparing the financial statements, the Directors are required to use certain critical accounting 
estimates and are required to exercise judgement in the application of the Group and Company’s accounting policies. 
The Group and Company’s principal accounting policies under IFRS have been consistently applied to all the years presented. 
Adoption of new accounting policies
There are no other new IFRSs or International Financial Reporting Interpretations (IFRIC) that are effective for the first time for the 
52 weeks ended 26 February 2022 which have a material impact on the Group. 
The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:
New amended standard or interpretation
Effective date – for accounting 
periods beginning on or after
Amendments to IAS 1, Presentation of financial statements on classification of liabilities
1 January 2023
IFRS 17, Insurance contracts
1 January 2023
Amendments to IAS 8, Definition of accounting estimates
1 January 2023
Amendments to IAS 12, Deferred tax relating to assets and liabilities from a single transaction
1 January 2023
There is not any known or reasonably estimable information relevant which suggests that the impact of applying the new 
standards will materially impact the financial statements in the initial period of application.
Going concern
The Directors have prepared these financial statements in consideration of the appropriateness of the going concern basis, 
taking account of the material uncertainty due to the quantum and timing of unaffordable lending redress potentially payable to 
customers, and in respect of the extension or deferral of the term-out clause and availability of funding past the current formal 
facility end date of 31 March 2023.
The Group’s current funding facility of £35m is in place until 31 March 2023, supported by a funding consortium of two existing 
providers. Discussions continue with lenders regarding the covenants within the facility, the extension or deferral of the term-
out clause which would be enacted by the end of September 2022 and would place restrictions on the ability of the Group to 
issue new loans and the facilities possible extension. This term out clause is pre-existing and essentially provides assurance 
to the funders of the repayment of the facility within the last 6 months of the agreed term. In practice, this has the effect of 
converting the rolling credit facility to a term loan. This would mean that any subsequent collections made on the loan book, 
would be ringfenced to pay down the facility, less any operational costs the business has. Therefore it would place restrictions 
on the business with regard to the issue of new loans. Discussions with the lenders have already led to a temporary deferral of 
the testing of two covenants from August to September 2022, to allow time for further discussions with the lenders. These two 
covenants are linked to profitability and, if tested, are likely to fall outside of covenant range. There has been no breach, nor waiver 
of covenants up to the date of the report. Whilst discussions are at an advanced stage, if a formal agreement is not reached by 
the end of September 2022, then a term-out clause would be enacted, which would place restrictions on the ability of the Group 
to issue new loans. However, management is in discussion with the lenders regarding a potential extension to the term-out.  
The Board recognises that the current funding facility is in place for less than 12 months following the date of signing the  
financial statements.
The Group has observed a noticeable increase in the level of complaints received in particular from CMCs during the year. The 
Directors accept there is a liability in relation to customer redress claims for unaffordable lending against the Company (“redress 
claims”) at the balance sheet date, however there is significant uncertainty of the total liability which will be paid. This is due to 
the methodology for assessing the population of claims being yet to be agreed, and the level of subsequent customers who may 
claim against that methodology not yet being known.
103
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

1. ACCOUNTING POLICIES CONTINUED
Going concern continued 
As part of its annual planning process, the Group assessed its business plans and subsequently ran a number of scenarios 
around the key areas of sensitivities, namely:
•	
 Loan volumes and credit risk
•	
 Collections and loan book quality
•	
 Complaints volumes
•	
 Cash availability
•	
 Collect-out scenario (in accordance with regulatory guidance)
In assessing the Group’s going concern status the Directors produced a number of forecast scenarios, all of which include a 
requirement for funding in line with the current agreement with lenders, such that the term-out clause is not triggered, and any 
future covenant testing can be met. The forecast on which the Directors are basing its going concern assessment includes an 
assumption that the settlement of the complaints provision (“Redress Claims”) occurs in an orderly manner over a period of time 
and that complaints do not remain at recent peak levels. If complaints volumes are higher than this level then this will accelerate 
the settlement of the Redress Claims liability and will therefore have a detrimental impact on liquidity. The timing of the settlement 
of the Redress Claims liability is key to the going concern assessment of the Group.
Having considered these scenarios and assumptions, the Directors consider that the underlying profitability of the Group means 
that the business is viable.
Based on this the financial statements for the Group and the Company have been prepared on the going concern basis.
However the quantum of the redress claims liability and timing and settlement as well as the extension or deferral of the term-out 
clause and the availability of funding beyond 31 March 2023 create a material uncertainty that may cast significant doubt about 
the Group’s and Company’s ability to continue as a going concern such that it may be unable to realise its assets and discharge 
its liabilities in the normal course of business.
IFRS 16 Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use 
asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term 
leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group 
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another 
systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement 
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental 
borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
•	
fixed lease payments (including in-substance fixed payments), less any lease incentives;
•	
variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement 
date;
•	
the amount expected to be payable by the lessee under residual value guarantees;
•	
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
•	
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the 
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
•	
The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease 
liability is remeasured by discounting the revised lease payments using a revised discount rate.
•	
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed 
residual value, in which case the lease liability is remeasured by discounting the revised lease payments using the initial 
discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount 
rate is used).
•	
A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease 
liability is remeasured by discounting the revised lease payments using a revised discount rate.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
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Morses Club PLC 
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The Group recognised such adjustments for vehicles during the current period in light of lease term extensions that were enacted.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before 
the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and 
impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is 
located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is 
recognised and measured under IAS 37. The costs are included in the related right-of-use asset, unless those costs are 
incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease 
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise 
a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation 
starts at the commencement date of the lease. The Group does not have any leases that include purchase options or transfer 
ownership of the underlying asset.
The right-of-use assets are presented separately on the face of the balance sheet.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-
use asset. The Group does not have any lease payments which fall under the definition of variable lease payments.
For short-term leases (lease term of 12 months or less) and leases of low-value assets (such as personal computers and office 
furniture), the Group has opted to recognise a lease expense on a straight-line basis as permitted by IFRS 16. This expense is 
presented within administrative expenses in the consolidated income statement.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and 
associated non-lease components as a single arrangement. The Group has used this practical expedient for property leases for 
which the business rate is included in the lease contract.
Basis of consolidation
The Group financial statements drawn up to 26 February 2022 consolidate the financial statements of the Company and its 
subsidiary undertakings from the date control passes to the Group until the date control ceases. Control is achieved when the 
Group:
•	
has the power over the investee;
•	
is exposed, or has rights, to variable returns from its involvement with the investee; and
•	
has the ability to use its power to affect returns.
All intra-Group transactions, balances and unrealised gains on transactions between Group companies are eliminated on 
consolidation. The accounting policies of subsidiaries are consistent with the accounting policies of the Group.
Revenue recognition
Under IFRS 9, all receivables are recognised within Stage 1 on inception of the loan. A customer will then move to Stage 2 when 
there has been a significant increase in credit risk through a deterioration in their payment performance. Stage 3 represents a 
customer in default. Revenue recognition is recognised on the gross receivable in Stages 1 and 2 and on the net receivable in 
Stage 3. A customer can only move to or back out of Stage 3 for revenue recognition purposes at the Group’s interim or year end.
Stage 1 – Accounts at initial recognition. Revenue is recognised on the gross receivable before impairment provision.
Stage 2 – Accounts which have suffered a significant deterioration in credit risk but have not defaulted. Revenue is recognised on 
the gross receivable before impairment provision.
Stage 3 – Accounts which have defaulted. Revenue is recognised on the net receivable after impairment provision.
Under IFRS the amount of revenue recognised is capped at the contractual amount due.
Digital revenue for recurring monthly management fees in relation to current accounts is recognised in accordance with IFRS 15. 
Fees and commissions receivable and payable are recognised when the service is provided, or when transactions are processed 
on an accruals basis.
See Critical accounting judgements and key sources of estimation uncertainty on page 111 for more information.
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1. ACCOUNTING POLICIES CONTINUED
Broker commissions
In line with IFRS 9 broker commission costs are recognised on an EIR basis in the income statement spread over the term  
of the contract. 
Net loan book
All customer receivables are initially recognised at the amount loaned to the customer i.e., fair value. After initial recognition the 
amounts receivable from customers are subsequently measured at amortised cost.
The Directors assess on an ongoing basis whether there is evidence that a loan asset or group of loan assets is impaired 
and requires an additional deduction for impairment. Impairment is calculated using models which use historical payment 
performance and considers the outlook for macro-economic conditions to calculate the estimated amount and timing of future 
cash flows from each arrears stage. Impairment is then calculated by estimating the future cash flows for such impaired loans, 
discounting the cash flows to a present value using the original effective interest rate (EIR) and comparing this figure with the 
balance sheet carrying value. All such impairments are charged to the income statement.
Stage 1 – Accounts at initial recognition. The impairment provision is based on 12 months’ expected losses, based on historic 
performance. Under IFRS 9, all receivables are recognised within Stage 1 on inception of the loan.
Stage 2 – Accounts which have suffered a significant deterioration in credit risk but have not defaulted. The impairment 
provision is based on lifetime losses, based on historic performance. A customer will then move to Stage 2 when there has been 
a significant increase in credit risk through a deterioration in their payment performance, represented in HCC by two missed 
payments in a 13-week period and in the Digital division by any single missed monthly payment.
Stage 3 – Accounts which have defaulted. The impairment provision is based on lifetime losses, based on historic performance. 
Stage 3 represents a customer in default, equivalent in HCC to ten missed payments in a 13-week period. In the Digital division 
Stage 3 is represented by more than two missed monthly payments.
Key assumptions in ascertaining whether a loan asset or group of loan assets is impaired include information regarding the 
probability of any account going into default and information regarding the likely eventual loss including recoveries. These 
assumptions for estimating future cash flows are based upon observed historical data and updated as management considers 
appropriate to reflect current and future conditions. All assumptions are reviewed regularly to take account of differences 
between previously estimated cash flows on impaired debt and the eventual losses.
Payment performance and missed payments are used as indicators to identify loans with no reasonable expectation of recovery 
and these loans are subsequently written off.
Payment frequency adjustment
During the latter months of FY22, management noticed an emerging trend around the profiling of debt and collection 
performance around calendar month ends. After reviewing data, it was identified that a growing number of customers were 
opting to make their repayments either fortnightly or monthly. 
In practice, what was identified was that as these non-weekly payers were not paying each week, they were showing as having 
‘missed’ a payment, and slipping down the payment performance bands, despite there being no expectation from management 
that the customers would be making a payment. As the customers’ payment performances were deteriorating (as their 
fortnightly/monthly payment was not yet due), these customers would attract a larger provision than was necessary. When the 
customers next made their payment, their payment performance would correct to its rightful state.
In order to ensure that the HCC division did not provide for customers at the wrong level – customers who were showing as 
having missed payments when they had not – management has split the customer book into three tranches: weekly payers, 
fortnightly payers and monthly payers. These tranches were used to assess whether a payment was due at the period end and 
the impairment rating by band was updated accordingly.
Write-off policy
A customer’s balance is fully written off in HCC at the point the customer has gone 17 weeks without any payment and in the 
Digital division when more than three payments are missed during the life of the loan. Before this point the balance is heavily 
provided for in accordance with IFRS 9. When a debt is sold and the cash is received for the debt, the recoveries are credited to 
the income statement.
See Critical accounting judgements and key sources of estimation uncertainty on page 111 for more information.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
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Macro-economic overlay
Through involvement in the Regional CBI, Morses Club PLC receives good insight into the current macro-economic landscape. 
Most economic analysis from the Bank of England and HM Treasury recognises the likelihood of a downturn in the economy as 
a result of the conflict in Ukraine and the continued impact of Covid-19, with a potential risk of recession and increased levels of 
unemployment. In terms of the impact of unemployment, the home credit sector has historically been quite resilient in periods 
where unemployment has been increasing, due in part to the HCC customer base typically having a mixture of wages and 
benefits within household incomes.
In addition to monitoring economic data, the collection performance experienced through the Covid-19 pandemic, which showed 
improvement immediately post first lockdown and no drop off in performance in later lockdown periods, is evidence that collection 
performance is not impacted by traditional macro-economic events.
The Company’s credit policies incorporate the ONS expenditure model and have been updated for recent increases to inflation 
and the cost of energy. After carefully considering the economic factors impacting the Group’s loan receivables balance, such 
as inflation, interest rates, the ending of furlough, and reviewing historical customer payment behaviours, management has 
concluded that sufficient loan impairment provisions have already been recognised in the financial statements, and a macro-
economic overlay adjustment is therefore not required.
Business combinations
Acquisitions are accounted for using the acquisition method. Acquisition costs are expensed to the income statement. The 
consideration transferred in a business combination is measured at fair value with the fair value of deferred contingent 
consideration determined by considering the expected payment, discounted to present value using a risk-adjusted discount rate. 
The expected payment is determined separately in respect of each individual earn-out agreement taking into consideration the 
expected level of profitability of each acquisition. Post acquisition the discounted consideration is unwound on an EIR basis as a 
finance cost before being physically paid in line with the share purchase agreement.
At the acquisition date the identifiable assets acquired, and the liabilities assumed are recognised at their fair value except that 
deferred tax assets or liabilities are recognised and measured in accordance with IAS 12 Income Taxes.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings and trade and other payables.
Trade payables are obligations to pay for goods or services that have been acquired from suppliers in the ordinary course of 
business and are classified as current liabilities if payment is due within one year or less, otherwise they are presented as non-
current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective  
interest method.
Borrowings are recognised initially at fair value, being issue proceeds less any transaction costs incurred. Borrowings are 
subsequently stated at amortised cost; any difference between proceeds less transaction costs and the redemption value is 
recognised in the income statement over the expected life of the borrowings using the effective interest rate. Borrowings are 
classified as current liabilities unless the Group or Company has an unconditional right to defer settlement of the liability for at 
least 12 months after the balance sheet date.
Goodwill
Goodwill arising on the acquisition of business combinations, representing any excess of fair value of the consideration given over 
the fair value of the identifiable assets and liabilities acquired, is capitalised and reviewed for impairment at least annually.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-
generating units) expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been 
allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the 
recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first 
to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the 
carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
Gains on acquisition arising on the purchase of a business are recognised directly in the income statement.
See Critical accounting judgements and key sources of estimation uncertainty on page 111 for more information.
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1. ACCOUNTING POLICIES CONTINUED
Other intangible assets
Other intangible assets include acquisition intangibles in respect of customer relationships and agent networks as well as 
software, servers and licences.
The fair value of customer relationships on acquisition has been estimated by discounting the expected future cash flows from 
the relationships over their estimated useful economic lives of 10 years, with such estimate being based on previous experience 
of similar acquisitions. The assets will be amortised over their estimated useful lives in line with the realisation of their expected 
benefits. Due to the behavioural profile of our customers, this will naturally result in a greater amortisation charge in the early 
years with a corresponding reduction in later years.
The fair value of agent networks on acquisition is calculated based on the estimated cost of developing a similar network 
organically. The assets are amortised over their estimated useful economic lives of 10 years, with such estimate being based 
on previous experience of similar acquisitions, in line with the realisation of their expected benefits arising from the customer 
relationships associated with the agent network.
Software and licences are stated at cost, net of amortisation and any provision for impairment. Amortisation is provided at the 
following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.
Software and licences	
–	
20%-33% on cost
Amortisation is included within administration expenses. Other intangible assets are valued at cost less subsequent amortisation 
and impairment, and are tested at least annually. An impairment loss is recognised for the amount by which the asset’s carrying 
value exceeds the higher of the asset’s value in use and its fair value less costs to sell.
Software-as-a-Service (SaaS) arrangements
The IFRS Interpretation Committee (IFRIC) has published two agenda decisions clarifying how SaaS should be accounted for. 
The first agenda decision, published in March 2019, concludes that a SaaS arrangement that conveys to the customer only the 
right to receive access to the supplier’s application software in the future is a service contact, rather than a software lease or the 
acquisition of a software intangible asset.
The second agenda decision, published in April 2021, addresses how a customer should account for the costs of configuration or 
customisation of the supplier’s application software in a SaaS arrangement that is determined to be a service contract.
Where a change in accounting policy is required to apply the conclusions reached by the IFRS Interpretation Committee, this must 
be accounted for by applying IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and if the impact is material, 
to restate prior year comparatives. The agenda decisions have not resulted in a material impact on the Group or Company 
therefore the prior year comparatives have not been restated.
The Group recognises the cost of SaaS arrangements in the income statement over the term of the contract. Configuration and 
customisation costs are recognised in the income statement when the service is received except for customisation costs that are 
not distinct from the SaaS access, in which case the costs are recognised over the term of the contract.
Interest Rate Benchmark Reform Phase 2
In 2021 the Group adopted the Interest Rate Benchmark Reform Phase 2 amendments issued by the IASB. These amendments 
require that changes to expected future cash flows that both arise as a direct result of IBOR reform and are economically 
equivalent to the previous cash flows are accounted for as a change to the effective interest rate with no adjustment to the asset 
or liability carrying value and no immediate gain or loss is recognised.
Property, plant and equipment
Tangible fixed assets are stated at cost or valuation, net of depreciation and any provision for impairment. Depreciation is provided 
at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.
Computers and tablets	
– 	
20%-33% on cost 
Fixtures & fittings	 	
– 	
20% on cost
Impairment of fixed assets
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to 
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the 
recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where the asset does 
not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate 
assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-
generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with an indefinite useful life are tested for impairment at least annually and whenever there is an indication at 
the end of a reporting period that the asset may be impaired.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
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Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated 
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of 
the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than the carrying amount, the carrying 
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately 
in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a 
revaluation decrease and to the extent that the impairment loss is greater than the related revaluation surplus, the excess 
impairment loss is recognised in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the 
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that 
would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A 
reversal of an impairment loss is recognised immediately in profit or loss to the extent that it eliminates the impairment loss which 
has been recognised for the asset in prior years.
Right-of-use assets are tested for impairment annually whenever there is an indication at the end of the reporting period that the 
asset may be impaired.
Investments in subsidiaries
Subsidiaries are entities over which the Company has power to govern the financial and operating policies so as to obtain benefits 
from its activities. Subsidiaries are consolidated from the date on which control is transferred to the Company. They are de-
consolidated from the date on which control ceases.
Investments in subsidiaries are stated at cost less any provision for impairment. The investments in subsidiaries are considered for 
impairment on a biannual basis.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand with maturities of three months or less. Bank overdrafts are 
presented in current liabilities to the extent that there is no legal right of offset and intention to settle on a net basis with cash 
balances.
Pension costs and other post-retirement benefits
The Group operates a defined contribution pension scheme. Contributions payable to the Group’s pension scheme are charged to 
the income statement in the period to which they relate.
Intercompany
Intercompany transactions are recorded at fair value on initial recognition and then amortised cost to enable recognition of 
any expected credit losses. Expected credit losses on intercompany balances are assessed at each balance sheet date. The 
probability of default (PD) and loss given default (LGD) are determined for each loan based on the subsidiary’s available funding 
and cash flow forecasts.
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax 
rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated 
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax is valued at the 
prevailing rates at which it is expected to unwind.
Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable 
profits will be available against which those deductible temporary differences can be utilised.
Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than 
in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. 
In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Finance costs
Finance costs comprise the interest expense on external borrowings which are recognised in the income statement in the 
period in which they are incurred and the funding arrangement fees which were prepaid and are being amortised to the income 
statement over the length of the funding arrangement. Finance costs also include interest on lease liabilities.  
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1. ACCOUNTING POLICIES CONTINUED
Dividend policy
The Directors will assess dividend payments in the context of consolidation opportunities, new product investment requirements, 
cash availability and the broader growth strategy of the Company.
 
Leasehold
Costs incurred in refurbishing or fitting out leasehold properties are capitalised and depreciated over the length of the relevant 
lease. At period end these assets had a £Nil carrying value having been fully depreciated in prior periods.
Group restructuring reserve
The Group reconstruction reserve was created within the Company balance sheet during the financial year ending 28 February 
2015. This was required following the Company’s acquisition of 100% of the Ordinary Share capital of Shopacheck Financial 
Services Limited (SFS) from its then parent company, and the subsequent hive up of the trade and assets of SFS into the 
Company at carrying value.
The Group reconstruction reserve was initially accounted for using merger accounting, with the assets and liabilities of SFS 
therefore being transferred into the Company at carrying value rather than fair value. The difference between the carrying value 
of the assets and liabilities transferred and the consideration paid was taken directly to the Group reconstruction reserve.
There has been no change to the balance held within this reserve since it was initially recognised and this is due to the Company 
continuing to own 100% of the Ordinary Share capital of SFS.
Share-based payments
The Company operates three equity-settled share-based compensation schemes, Deferred Share Plan for the Directors and a 
Share Option Plan and Share Incentive Plan for the employees.
The fair value of the share options granted is recognised over the vesting period to reflect the achievement of performance 
conditions over time. The charge relating to grants to employees of the Company is recognised as an expense in the  
income statement.
The fair value of the share options granted, excluding the impact of any non-market-vesting conditions, is calculated using 
established option pricing models, being Monte Carlo simulation or Black-Scholes. The probability of meeting non-market-vesting 
conditions, which include profitability targets, is used to estimate the number of share options which are likely to vest.
Exceptional items
Exceptional items are items that are unusual because of their size, nature or incidence and which the Directors consider should 
be disclosed separately to enable a full understanding of the Group’s results. Exceptional income and costs are recognised in the 
income statement in the period they are incurred.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable 
that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the 
reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using 
the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the 
effect of the time value of money is material).
The cost of administrating any scheme in relation to the complaints liability is not included in the year-end provision. 
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a 
receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable 
can be measured reliably.
Contingent liabilities
Contingent liabilities are possible obligations depending on whether some uncertain future event occurs, or present obligations 
where an economic outflow of resources is not probable, or the amount cannot be measured reliably. Contingent liabilities are  
not recognised in the balance sheet, but relevant information is disclosed, unless the possibility of an outflow of economic 
resources is remote.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
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Segment reporting
IFRS 8 Operating Segments requires segments to be identified on the basis of internal reports that are regularly reviewed by the 
Chief Operating Decision Maker (CODM). The Chief Operating Decision Maker is the Executive Committee (ExCo).
The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment 
profit represents the profit earned by each segment. This is the measure of profit that is reported to the Board of Directors for the 
purpose of resource allocation and the assessment of segment performance.
When assessing segment performance and considering the allocation of resources, the Board of Directors reviews information 
about segment assets and liabilities. For this purpose, all assets and liabilities are allocated to reportable segments with the 
exception of intangible assets and current and deferred tax assets and liabilities.
Critical accounting judgements and key sources of estimation uncertainty
The following areas are the critical judgements and key sources of estimation uncertainty that the Directors have made in 
applying the Group’s accounting policies:
Critical accounting judgements
There are no critical accounting judgements.
Key sources of estimation uncertainty
Impairment HCC
Under IFRS 9 an impairment provision is recognised for expected credit losses on financial assets measured at amortised cost 
based on expected future credit losses. At the reporting date £30.7m (2021: £32.6m) was recognised as an impairment provision 
against amounts receivable from customers.
The Group is required to estimate the quantum and timing of cash flows that will be recovered, which are discounted to present 
value based on the EIR of the loan. Receivables are impaired when the cumulative amount of two or more contractual weekly 
payments have been missed in the previous 13 weeks, since only at this point do the expected future cash flows from loans 
deteriorate significantly. 
Impairment is calculated using models which use historical payment performance to generate the estimated amount and timing 
of future cash flows from each arrears stage. Management uses a combination of historical cash performance curves to estimate 
future cash flows. These estimations are revised annually and approved by management.
A key estimate within the impairment provision is the collection curves. Management has considered the best way to deal with the 
Covid-19 event and its impact on the impairment provision and income recognition. It was determined that continuing to use a flat 
five-year average of the cash curves and EIR calculation would materially understate the provision. A weighting of the individual 
cash curves to give more prominence to the most recent cohort was adopted.
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Impairment 
Provision
Deferred  
Income
Option 1
20%
20%
20%
20%
20%
(£29.7m)
(£22.3m)
Option 2
15%
15%
15%
15%
40%
(£29.3m)
(£22.4m)
Option 3
10%
10%
10%
10%
60%
(£28.8m)
(£22.4m)
Option 4
0%
0%
0%
0%
100%
(£28.0m)
(£22.4m)
Management believes that option 3 is the most appropriate weighting as a review of expected collections versus actual collections in 
the prior year confirms the relevance and accuracy of the method of weighting used.
Please note that the remote lending and collection model of our Digital lending business has resulted in a smaller Covid-19 
impact, and therefore management has not applied this weighting to the Digital division. The impairment numbers above are for 
Home Collected Credit only.
Based on past experience, actual cash collections could vary by up to 5% from this estimate. If cash collections were 5% higher/
lower than this estimate the impact on the impairment provision would be £2.1m (2021: £4.4m) higher/lower.
Another key estimate is the determination of whether there has been a significant increase in credit risk on financial assets since 
initial recognition which determines whether 12-month or lifetime expected credit losses are recognised.
If lifetime expected credit losses were recognised on all assets this would result in an increase in expected credit losses of £0.4m 
(2021: £0.5m). The sensitivity is of a small magnitude due to the short-term nature of the products.
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1. ACCOUNTING POLICIES CONTINUED
Limitations in the impairment model or data inputs will be identified through the ongoing assessment and validation of the output 
of the model. In these circumstances, management makes appropriate adjustments to the allowance for impairment losses to 
ensure that the overall provision adequately reflects all material credit risks. These adjustments are determined by considering 
exposures which have not been adequately captured by the impairment model and range from changes to model inputs and 
parameters, at account level, through to more qualitative post-model overlays. Changes applied to model inputs and parameters 
are deemed to be in-model overlays; more qualitative changes that have a higher degree of management judgement are 
deemed to be post-model overlays. All adjustments are reviewed quarterly and are subject to internal review and challenge to 
ensure that amounts are appropriately calculated. 
As a growing number of customers now pay fortnightly or monthly instead of weekly, an adjustment was made to the impairment 
provision, as using legacy methods, customers were showing as having missed a weekly payment(s), when in reality they were 
not due to make a payment as the customer had opted to pay fortnightly or monthly. In order to ensure the impairment provision 
was not overstated, customers who had opted to pay fortnightly or monthly had their payment performance restated where they 
were previously inaccurately attracting a higher rate of impairment.
This adjustment resulted in a reduction to the impairment provision of £973k (FY21: £Nil).
Revenue recognition
Under IFRS 9 interest income is recognised by applying the EIR to the carrying value of a loan. The EIR is calculated at inception 
and represents the rate which exactly discounts the future contractual cash receipts from a loan to the amount of cash advanced 
under that loan.
Management determined that continuing to use a flat five-year average of the cash curves and EIR calculation would materially 
understate the provision. A weighting of the individual cash curves to give more prominence to the most recent cohort was 
adopted. Details of the weightings considered can be found on page 111.
The following sensitivities are in relation to HCC only given Digital is not materially sensitive in this area.
If the expected life of the loan lengthens by two weeks, as has been seen under Covid-19, it is estimated that revenue would be 
approximately £0.6m lower (2021: £0.6m lower). The maximum movement in the average life year on year for the last five years 
has been two weeks, therefore this is considered to be a reasonable basis for the sensitivity analysis performed.
Goodwill
Under IAS 36 an annual impairment review for goodwill balances is required. The Group has also considered both internal and 
external indicators of impairment, particularly the market capitalisation of the Group compared to the carrying value of net assets.
Determining whether goodwill is impaired requires an estimation of the future cash flows. These are based on the expectations 
within the current business plan taking into account the current performance of the business.
Digital has conducted several sensitised scenarios on the goodwill impairment assessment given the base scenario provides 
modest headroom of £7m against the CGU’s assets. The key assumptions in the forecast are:
•	
Lending levels which drive the sales growth and revenue.
•	
Customer performance which impacts collections and therefore impairment levels.
•	
Growth rate.
•	
Discount rate.
Forecast sales would have to reduce by more than 11% or the discount rate used would have to be increased to more than 16.4% 
before giving rise to any impairment.  
Complaints liability
The non-standard lending sector has continued to experience the impact of CMCs and high-profile publicity campaigners 
promoting the potential for customers to claim redress from their lenders. As a result, the number of complaints in regard of 
unaffordable lending and referrals to the FOS has risen significantly across the sector. The HCC division has experienced an 
increase in complaints and FOS referrals during the period which was impacted by a rapid increase in claim volumes submitted 
via claims management companies. As a result, a discernible trend has emerged and so the Group has recognised a liability for 
the cost of fully settling complaints in relation to all affected lending from the date of transfer of the consumer credit regulation 
to the FCA as a guide timeline up to the balance sheet date estimated at a gross redress of £112m for customers who will be 
eligible to be redressed, at an estimated take-up rate of 40%. IAS 37 requires that where the time value of money is material the 
present value of costs should be reflected. The liability of £39.1m has been discounted by £2.2m and represents the present value 
of management’s best estimate of the future outflow of cash required to settle these claims. In addition management estimates 
that approximately 7.8% of redress will be written off against the loan book. The complaints provision has been determined 
based on information available up until the reporting date. There is significant uncertainty regarding the exact quantum of the 
gross redress exposure and the level of take up from eligible customers and a different methodology or assumptions could be 
subsequently adopted based on discussions with the FCA and ultimately through the approval at the UK courts should a scheme 
of arrangement proceed.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
112
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

In producing the gross redress amount there was a movement from a draft estimate to the final estimate of 6%, as a result 
Management considers that the gross redress could be +/- 10% resulting in a change of +/- £12m in the gross redress value. As 
the estimate used for the take-up rate is 10% higher than the highest rate seen elsewhere in the industry historically, Management 
also believes the take-up rate could be +/- 10% resulting in a range of take-up rates of 36% to 44%.
The following table sets out the increase/(decrease) to the provision and therefore charge should the gross redress or the take-up 
rate be an indicative 10% lower or higher than recognised:
Increase/(decrease) £’000
10% lower
Gross Redress
No change
10% higher
Take-up rate
10% lower
(7,199)
(3,768)
(373)
No change
(3,768)
–
3,734
10% higher
(373)
3,734
7,787
Other accounting estimates
Impairment Digital
Under IFRS 9 an impairment provision is recognised for expected credit losses on financial assets measured at amortised cost 
based on expected future credit losses. At the reporting date £6.5m (2021: £4.0m) was recognised as an impairment provision 
against amounts receivable from customers.
Dot Dot Loans is required to estimate the quantum and timing of cash flows that will be recovered, which are discounted to present 
value based on the EIR of the loan. Receivables are impaired when one or more contractual monthly payments have been missed, 
since only at this point do the expected future cash flows from loans deteriorate significantly. The determination of expected credit 
losses involves complex modelling techniques and requires management to apply significant judgements to calculate expected 
credit losses. For the purpose of IFRS 9, default is assumed when two contractual repayments have been missed.
During the second half of 2021 Dot Dot Loans implemented a new IFRS 9 model to assess provision requirements in a more 
sophisticated manner given the availability of more data. This model will be regularly tested using subsequent cash collections to 
assess accuracy. The impact of implementing this model was a £1.4m decrease in the provision. No overlays have been made in 
Digital in 2022. 
The impairment model will be subject to periodic monitoring and validation of model components, including probability of default, 
exposure at default and loss given default to ensure it remains accurate.
The most sensitive component of the Digital impairment model is the probability of default. If the probability of default was 5% 
higher/lower the impact on the impairment provision would be £0.4m higher/lower.
2. STAFF COSTS
Group
Company
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
Wages and salaries
19,832
22,059
14,573
17,453
Social security costs
2,002
2,588
1,509
2,171
Other pension costs
894
979
659
770
Total staff costs
22,728
25,626 
16,741
20,394
Redundancy costs
497
1,172
431
1,122
Total staff costs
23,225
26,798 
17,172
21,516
Redundancy costs are a combination of post-acquisition integration costs and business as usual restructuring costs. The table 
above excludes the network of self-employed agents.
The average monthly number of employees during the period was as follows:
Group
Company
52 weeks
ended
26.2.22
52 weeks
ended
27.2.21
52 weeks
ended
26.2.22
52 weeks
ended
27.2.21
Management
265
218
180
182
Clerical & field staff
271
382
210
289
536
600
390
471
113
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

3. EXCEPTIONAL COSTS
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
Complaints liability
42,640 
–
Corporate restructuring costs
1,759 
–
U Account closure costs
2,380 
–
Total exceptional costs
46,779
–
The complaints liability is a provision recognised in relation to unaffordable lending.
The corporate restructuring costs include legal and professional fees in relation to a restructuring of the Group corporate entities 
that the Board decided not to proceed with in December 2021. 
U Account closure costs include the write-off of assets and contracts. An assessment was performed to conclude if U Account 
represents a discontinued operation in line with the technical requirements of IFRS 5 Non-Current Assets Held for Sale and 
Discontinued Operations. As U Account does not represent a major line of business, it was concluded that it is not a discontinued 
operation therefore the costs of closure are recognised as exceptional costs.
These items are considered to be exceptional due to their size and they are all one-off and are not expected to recur. £43.3m 
of the exceptional costs sit within administration expenses on the income statement and £3.5m is within impairment of financial 
assets.
4. LOSS BEFORE TAX 
The operating loss is stated after charging:
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
Depreciation – owned assets
251
329
Amortisation of intangibles
2,565
3,135
Depreciation of right-of-use asset
960
1,586
Impairment of financial assets
35,960
20,794
Lease liability finance costs
222
353
Lease rentals – motor vehicles
118
205
Lease rentals – property
144
443
Directors’ and key management personnel remuneration includes the following expenses:
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
Short-term employee benefits
1,515
1,055
Post-employment benefits
44
32
Long-term benefits
–
–
Termination benefits
–
–
Share-based payments
321
248
1,880
1,335
The number of Directors to whom retirement benefits were accruing was as follows:
Money purchase schemes
3
4
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
114
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Information regarding the highest paid Director is as follows:
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
Emoluments
666
462
Pension contributions to money purchase schemes
20
17
The analysis of auditor’s remuneration is as follows:
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
Fees payable to the Company’s auditors for the audit of the Group’s annual accounts
728
312
Total audit fees
728
312
Audit-related assurance services
36
35
Total non-audit fees
36
35
5. SEGMENT REPORTING
IFRS 8 requires segment reporting to be determined by the internal financial and operational information reported to the Chief 
Operating Decision Maker. The Group’s Chief Operating Decision Maker is deemed to be the ExCo whose primary responsibility 
is to support the CEO in managing the Group’s day-to-day operations and trading performance. On this basis the Group has 
determined it has two cash-generating units for the purposes of segmental reporting comprising Home Collected Credit (Morses 
Club) and Digital (Shelby Finance Limited and U Holdings Limited). These two cash-generating units are then assessed for 
impairment, see Note 11. The Group’s operations are all located in the United Kingdom and all revenue is attributable to customers 
in the United Kingdom.
Group
Revenue
Profit/(loss) before taxation
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
52 weeks
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
Home Collected Credit
81,789
86,430
9,561 
14,050
Digital
29,607
13,804
(5,606)
(10,512)
Total Group before amortisation of acquisition intangibles and 
exceptional items
111,396
100,234
3,955 
3,538
Intra-Group elimination*
–
–
155 
36
Amortisation of intangibles
–
–
(187)
(3,118)
Exceptional items
–
–
(46,779)
–
Total Group
111,396
100,234
(42,856)
456
Group
Segment assets
Segment liabilities
Net assets/(liabilities)
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Home Collected Credit
 130,460 
114,485
(68,467)
(21,255)
 61,993 
93,230
Digital
 28,453 
23,260
(28,393)
(23,976)
60
(716)
Total before intra-Group elimination
 158,913 
137,745
(96,860)
(45,231)
 62,053 
92,514
Eliminations*
(33,405)
(25,290)
 3,582 
3,429
(29,823)
(21,861)
Intra-Group elimination
(23,881)
(19,665)
 23,881 
19,665
– 
–
Total Group
101,627 
92,790 
(69,397)
(22,137)
 32,230 
70,653
*	
Group assets includes fixed asset investment of £31,011,415 (2021: £23,011,415), a tax asset of £24,000 (2021: £40,000) which are offset by intangible assets on acquisition of 
£Nil (2021: £Nil), goodwill on acquisition of £Nil (2021: £Nil) and inter-company provision of £941,176 (2021: £786,000) which are not attributable to a specific segment.
115
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ANNUAL REPORT & ACCOUNTS 2022 

5. SEGMENT REPORTING CONTINUED
Group
Capital expenditure
Depreciation
Amortisation
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Home Collected Credit
3,144
1,727 
80
170 
1,711
2,101 
Digital
1,136
3,884 
171
152
854
710
Total Group
4,280
5,611 
251
322
2,565
2,811 
6. FINANCE COSTS
52 weeks 
ended
26.2.22
£’000
52 weeks 
ended
27.2.21
£’000
Lease liabilities
222
472
Other interest payable
1,763
1,888
Total interest payable
1,985
2,360
7. TAXATION
Analysis of the tax charge
The tax charge on loss before tax for the period was as follows: 
52 weeks 
ended
26.2.22
£’000
52 weeks 
ended
27.2.21
£’000
Current tax
 
 
UK corporation tax
(380)
318
Adjustment in respect of prior years
(542)
24
Total current tax
(922)
342
Origination and temporary timing differences
(9,228)
(103)
Adjustment in respect of prior years
642
– 
Effect of change of tax rates
20
–
Total deferred tax
(8,566)
(103) 
Tax on (loss)/profit on ordinary activities
(9,488)
239
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
116
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Factors affecting the tax charge
The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The difference is explained below:
52 weeks 
ended
26.2.22
£’000
52 weeks 
ended
27.2.21
£’000
Profit before exceptional costs
3,923
456
Exceptional costs
(46,779)
–
(Loss)/profit on ordinary activities before tax
(42,856) 
456
 
 
(Loss)/profit on ordinary activities before exceptional items multiplied by the standard rate of corporation 
tax in the UK of 19% (2021: 19%)
(8,143)
87
Effects of:
Expenses not deductible for tax purposes 
339
233
Adjustment in respect of prior periods
101
 24 
R&D expenditure credit
(92)
–
Rate difference – deferred tax
(2,651)
(67)
Movement in amounts not provided in deferred tax
 1,171
 9
Tax losses surrendered by another Group company
–
(52)
Fixed asset differences
(214)
5
Tax on (loss)/profit on ordinary activities
(9,489) 
239
The standard rate of corporation tax applicable for the period ended 26 February 2022 is 19% (2021: 19%), the effective tax rate 
is 18% (2021: 52%). Deferred tax is calculated in full on temporary differences under the liability method using a rate of 25% (2021: 
19%). The increase in the main rate of corporation tax was substantively enacted on 24 May 2021. The rate of 25% is applicable 
from 1 April 2023, rather than the previously enacted reduction of 19%. 
Following discussion with our tax advisors, the complaints liability provision is being treated as tax deductible on the basis that it is 
a specific provision for redress payments which are trade-related revenue expenses. 
8. DIVIDEND PER SHARE
52 weeks 
ended
26.2.22
£’000
52 weeks 
ended
27.2.21
£’000
Dividend (£’000)
5,317
1,312
Weighted average number of shares (‘000s)
133,300 
131,383
Per share amount (pence)
3.99
1.00
The Company will not be recommending the payment of a final dividend for FY22.
117
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ANNUAL REPORT & ACCOUNTS 2022 

9. EARNINGS PER SHARE
52 weeks 
ended
26.2.22
52 weeks 
ended
27.2.21
(Loss)/earnings (£’000)
(33,367) 
218
Number of shares
Weighted average number of shares
133,300
131,383
Effect of dilutive potential Ordinary Shares through share options¹ (‘000s)
-
200
Weighted average number of shares for the purposes of diluted earnings per share (‘000s)
133,300
131,583
Basic (loss)/earnings per share amount (pence)
(25.03)
0.17
Diluted (loss)/earnings per share amount (pence)
(25.03)
0.17
1 Potential ordinary shares are not treated as dilutive when they would decrease a loss per share.
Diluted earnings per share calculates the effect on earnings per share assuming conversion of all dilutive potential Ordinary 
Shares. Dilutive potential Ordinary Shares are calculated for awards outstanding under performance-related share incentive 
schemes such as the Deferred Share Plans. The number of dilutive potential Ordinary Shares is calculated based on the number 
of shares which would be issuable if the performance targets have been met. 
10. LOSS OF PARENT COMPANY 
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Parent Company is not presented as 
part of these financial statements. 
The Parent Company’s loss for the financial period was £26,180,550 (2021: profit £11,531,489).
11. GOODWILL
Group  
Goodwill
£’000
Company 
Goodwill
£’000
Cost
At 29 February 2020
13,330
3,642
Additions 2020/21
–
–
At 27 February 2021
13,330
3,642
Additions 2021/22
–
–
At 26 February 2022
13,330
3,642
Impairment
At 29 February 2020
(349)
(349)
Impairment loss for the period
(127)
–
At 27 February 2021
(476)
(349)
Impairment loss for the period
–
–
At 26 February 2022
(476)
(349)
Net book value
At 26 February 2022
12,854
3,293
At 27 February 2021
12,854
3,293
At 29 February 2020
12,981
3,293
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
118
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Key assumptions used in goodwill impairment review
The market share price of the Company at 26 February 2022 was £0.134, reflecting the market’s view of the current and 
future value of the Group. This share price results in a market capitalisation value for the Company of £17.9m which is below the 
Company’s net asset value of £32.2m and therefore, an indicator of possible impairment. As a result, we have assessed the 
recoverable amount of both the Company’s goodwill and investment in subsidiary. The recoverable amount has been calculated 
using the value in use method. Goodwill is tested for impairment annually or more frequently if there are indications that goodwill 
might be impaired. Determining whether goodwill is impaired requires an estimation of the discounted future cash flows of the 
Company using a discount rate of 13% (FY21: 13%) and an initial growth rate over the first three years of 11% (FY21: 47%) followed by 
a terminal value based on a minimum future growth rate of 2% (FY21: 2%). The future cash flows take into account management’s 
view of the impact from Covid-19 on future performance. 
The Group has conducted a sensitivity analysis on the goodwill impairment assessment and believes that there are no reasonably 
possible changes to the key assumptions in the next year which would result in the carrying value of goodwill exceeding the 
recoverable amount. The key assumptions in the forecast are:
•	
Lending levels which drive the sales growth and revenue.
•	
Customer performance which impacts collections and therefore impairment levels.
•	
Growth rate.
•	
Discount rate.
Lending has been informed by the business’s ability to previously expand in this market. Performance assumptions are based  
on targeting the products and customers that will deliver an acceptable return. As the cost base is relatively stable, the key to 
deliver a return is the scale achieved by higher lending levels. The growth rates are the result of a slow-down in sales in FY23  
due to cash availability from settling redress claims followed by a return to previously experienced levels of lending by FY25.  
The discount rates which reflect the time value of money and the risks specific to the financial services sector are sourced from  
an independent third party. No reasonably foreseeable reduction in the assumptions would give rise to an impairment and 
therefore no further sensitivity analysis has been presented. The same assumptions have been applied to the goodwill 
impairment review in both CGUs.
The carrying amount of goodwill has been allocated to cash-generating units (see Note 5) as follows:
52 weeks 
ended
26.2.22
£’000
52 weeks
ended
27.2.21
£’000
HCC
 3,293 
 3,293 
Digital
 9,561 
 9,561 
 12,854 
 12,854
119
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

12. OTHER INTANGIBLE ASSETS
Group
Software
& Licences
£’000
Customer
Lists
£’000
Agent
Networks
£’000
Totals
£’000
Cost
At 29 February 2020
 12,761 
 21,620 
 874 
 35,255 
Additions
 5,282 
–
–
 5,282 
Disposals
(3,085)
–
–
(3,085)
At 27 February 2021
 14,958 
 21,620 
 874 
 37,452 
Additions
 4,074 
–
–
 4,074 
Disposals
(2,614)
–
–
(2,614)
At 26 February 2022
 16,418 
 21,620 
 874 
 38,912
Accumulated amortisation
At 29 February 2020
 6,140 
 20,915 
 839 
 27,894 
Charge for the period
 2,428 
 329 
 16 
 2,773 
Eliminated on disposal
(2,115)
–
–
(2,115)
Impairment losses
–
 38 
–
 38 
At 27 February 2021
 6,453 
 21,282 
 855 
 28,590 
Charge for the period
 2,378 
 178 
 7 
 2,563 
Eliminated on disposal
(757)
–
–
(757)
Impairment losses
–
–
 2 
 2 
At 26 February 2022
 8,074 
 21,460 
 864 
 30,398
Net book value
At 26 February 2022
 8,344 
 160 
 10 
 8,514 
At 27 February 2021
 8,505 
 338 
 19 
 8,862 
At 29 February 2020
 6,621 
 705 
 35 
 7,361 
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
120
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Company
Software
& Licences
£’000
Customer
Lists
£’000
Agent
Networks
£’000
Totals
£’000
Cost
At 29 February 2020
 11,198 
 3,689 
 154 
 15,041 
Additions
 1,625 
–
–
 1,625 
Disposals
(1,633)
–
–
(1,633)
At 27 February 2021
 11,190 
 3,689 
 154 
 15,033 
Additions
 3,059 
–
–
 3,059 
Disposals
(267)
–
–
(267)
At 26 February 2022
 13,982 
 3,689 
 154 
 17,825 
Accumulated amortisation
At 29 February 2020
 5,905 
 3,395 
 135 
 9,435 
Charge for the period
 1,969 
 124 
 8 
 2,101 
Eliminated on disposal
(1,633)
–
–
(1,633)
Impairment losses
–
 38 
–
 38 
At 27 February 2021
 6,241 
 3,557 
 143 
 9,941 
Charge for the period
 1,642 
 67 
 2 
 1,711 
Eliminated on disposal
(93)
–
–
(93)
Impairment losses
–
–
 2 
 2 
At 26 February 2022
 7,790 
 3,624 
 147 
 11,561 
Net book value
At 26 February 2022
 6,192 
 65 
 7 
 6,264 
At 27 February 2021
 4,949 
 132 
 11 
 5,092 
At 29 February 2020
 5,293 
 294 
 19 
 5,606 
Research and development expenditure expensed during the year was £Nil (2021: £Nil). 
IAS 38.122 requires the Group to disclose the carrying value and remaining amortisation period of individually material intangible 
assets; the table below includes all intangible assets that are considered to be individually material as at 26 February 2022, 
at both Group and Company level. Intangibles from acquisition activities represent the estimated fair value arising on the point 
of acquisition. The amounts in respect of customer lists and broker relationships are calculated on the discounted cash flows 
associated with the specific business area and based on the realisation of the expected benefits from these relationships. These 
amounts are amortised over the maximum useful life of 10 years from the date of acquisition.
Significant intangible assets
Group
Intangible assets
Carrying Value as at
26 February 2022
£’000
Carrying Value as at
27 February 2021
£’000
Amortisation
period
Years
Morses Club acquired customer lists
 160 
 339 
10 years
Morses Club IT software development (CAP/MAP)
6,192
4,949
Various at 20%-33% PA
Shelby IT software development (Equiniti)
2,037
3,287
Various at 20%-33% PA
Company
Intangible assets
Carrying Value as at
26 February 2022
£’000
Carrying Value as at
27 February 2021
£’000
Amortisation
period
Years
Morses Club acquired customer lists
 65 
 132 
10 years
Morses Club IT software development (CAP/MAP)
6,192
4,949
Various at 20%-33% PA
121
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ANNUAL REPORT & ACCOUNTS 2022 

13. PROPERTY, PLANT AND EQUIPMENT 
Group
Computers
& Tablets
£’000
Fixtures
& Fittings
£’000
Leasehold
£’000
Totals
£’000
Cost
At 29 February 2020
3,141
660
3
3,804
Additions
 160 
 169 
–
 329 
Disposals
(736)
(77)
(3)
(816)
At 27 February 2021
2,565
752
–
3,317
Additions
 206 
–
–
 206 
Disposals
–
(124)
–
(124)
At 26 February 2022
2,771
628
 – 
3,399
Depreciation
At 29 February 2020
2,779
204
3
2,986
Charge for period
 196 
 126 
–
 322 
Eliminated on disposal
(669)
(53)
(3)
(725)
At 27 February 2021
2,306
277
–
2,583
Charge for period
 123 
 128 
–
 251 
Eliminated on disposal
–
(124)
–
(124)
At 26 February 2022
2,429
281
–
2,710
Net book value
At 26 February 2022
342
347
–
689
At 27 February 2021
259
475
–
734
At 29 February 2020
362
456
–
818
Company
Computers
& Tablets
£’000
Fixtures
& Fittings
£’000
Leasehold
£’000
Totals
£’000
Cost
At 29 February 2020
2,109
168
 – 
2,277
Additions
 103 
 – 
 – 
 103 
Disposals
(290)
(43)
 – 
(333)
At 27 February 2021
1,922
125
 – 
2,047
Additions
 85 
 – 
 – 
 85 
Disposals
–
(113)
 – 
(113)
At 26 February 2022
2,007
12
 – 
2,019
Depreciation
At 29 February 2020
1,938
143
 – 
2,081
Charge for period
 153 
 17 
–
 170 
Eliminated on disposal
(290)
(43)
–
(333)
At 27 February 2021
1,801
117
 – 
1,918
Charge for period
 75 
 5 
–
 80 
Eliminated on disposal
–
(113)
–
(113)
At 26 February 2022
1,876
9
 – 
1,885
Net book value
At 26 February 2022
131
3
 – 
134
At 27 February 2021
121
8
 – 
129
At 29 February 2020
171
25
 – 
196
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
122
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

14. INVESTMENT IN SUBSIDIARIES
Company
£’000
Cost
At 29 February 2020
11,011
Additions – Shelby share issue
 12,000 
At 27 February 2021
23,011
Additions – Shelby share issue
 8,000 
At 26 February 2022
31,011
The Company owns 100% of the Ordinary Share capital of the following subsidiary undertakings, which are included in the Group’s 
consolidation: 
•	
Shopacheck Financial Services Limited (SFS), a Company registered in England and Wales (company number: 07067456) 
with Registered Office, Building 1, The Phoenix Centre, 1 Colliers Way, Nottingham NG8 6AT, whose principal activity was the 
provision of consumer credit and is currently non-trading.
•	
Shelby Finance Limited (SFL), a Company registered in England and Wales (company number: 08117620) with Registered 
Office, Building 1, The Phoenix Centre, 1 Colliers Way, Nottingham NG8 6AT, whose principal activity is the provision of 
consumer credit. 
As the net assets of SFL are insufficient to cover the investment value, a review of the investment carrying value in Shelby has 
been performed using forecast future cash flows of the Digital business. As the discounted future cash flows equate to a multiple 
of the investment value with headroom of £7m no provision for impairment has been made.
Shopacheck Financial Services Limited and U Holdings Limited both qualify for an exemption to audit under the requirements  
of Section 480 of the Companies Act 2006. Shelby Finance Limited qualifies for an exemption to audit under the requirements  
of Section 479A of the Companies Act 2006. As such, no audit has been conducted for these companies in the current  
financial year. 
15. RIGHT-OF-USE ASSETS
Group
Building
£’000
£
Equipment
£’000
£
Vehicles
£’000
£
Tablets
£’000
£
Totals
£’000
£
Cost
At 29 February 2020
1,888 
970 
1,537 
–
4,395 
Additions
98 
427 
235 
–
760 
Disposals
(612)
(25)
(314)
–
(951)
At 27 February 2021
1,374 
1,372 
1,458 
–
4,204 
Additions
17 
376 
–
717 
1,110 
Disposals
(605)
–
(616)
–
(1,221)
At 26 February 2022
786 
1,748 
842 
717 
4,093 
Accumulated depreciation
At 29 February 2020
515 
328 
769 
–
1,612 
Charge
474 
451 
661 
–
1,586 
Disposals
(393)
(16)
(281)
–
(690)
At 27 February 2021
596 
763 
1,149 
–
2,508 
Charge
180 
485 
215 
80 
960 
Disposals
(529)
–
(585)
–
(1,114)
At 26 February 2022
247 
1,248 
779 
80 
2,354 
Net book value
At 26 February 2022
539 
500 
63 
637 
1,739 
At 27 February 2021
778 
609 
309 
–
1,696 
At 29 February 2020
1,373 
642 
768 
–
2,783
123
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

15. RIGHT-OF-USE ASSETS CONTINUED
Company
Building
£’000
£
Equipment
£’000
£
Vehicles
£’000
£
Tablets
£’000
£
Totals
£’000
£
Cost
At 29 February 2020
1,161 
970 
1,537 
–
 3,668 
Additions
75 
427 
235 
–
 737 
Disposals
(565)
(25)
(314)
–
(904)
At 27 February 2021
 671 
 1,372 
 1,458 
–
 3,501 
Additions
2 
375 
–
717 
 1,094 
Disposals
(605)
–
(616)
–
(1,221)
At 26 February 2022
 68 
 1,747 
 842 
 717 
 3,374 
Depreciation
At 29 February 2020
458 
328 
769 
–
 1,555 
Charge
365 
451 
661 
–
 1,477 
Disposals
(347)
(16)
(281)
–
(644)
At 27 February 2021
 476 
 763 
 1,149 
–
 2,388 
Charge
103 
485 
215 
80 
 883 
Disposals
(529)
–
(585)
–
(1,114)
At 26 February 2022
 50 
 1,248 
 779 
 80 
 2,157 
Net book value
At 26 February 2022
 18 
 499 
 63 
 637 
 1,217 
At 27 February 2021
 195 
 609 
 309 
–
 1,113 
At 29 February 2020
 703 
 642 
 768 
–
 2,113 
Write-off of ROU assets is £0.1m (2021: £0.3m).
 
See Note 19 for additional information on leases.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
124
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

16. TRADE AND OTHER RECEIVABLES
Amounts receivable from customers
Group
Company
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Amounts falling due within one year:
Net receivable from advances to customers
53,214 
53,408 
43,626 
47,952 
Amounts falling due after one year:
Net receivable from advances to customers
2,633 
82 
–
–
Net loan book
55,847 
53,490 
43,626 
47,952 
Other debtors
 3,594 
 2,880 
2,996 
2,046 
Amounts owed by Group undertakings
–
–
25,203 
20,987 
Prepayments
 3,099 
 3,434 
2,266 
2,254 
62,540 
59,804 
74,091
73,239
Within the Company, an impairment provision of £0.9m (2021: £0.8m) is held against amounts owed by Group undertakings due 
in less than one year. This consists of performing loans of £26.1m categorised as Stage 1 against which the provision of £0.9m has 
been recognised. As the intercompany balance is Stage 1 its credit risk grade is assessed as being very good, see page 130. The 
Company has assessed the credit risk as low and calculated the estimated credit losses representing the probability of default 
and loss given default for these intercompany loans by considering the forecast future cash flows of the Digital business, as a 
result of which, there has been a £0.1m charge to the Company income statement in 2022 (2021: £Nil).
Group
Company
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Analysis by security
Other loans not secured
55,847 
53,490
43,626 
47,952
Amounts receivable from customers
55,847 
53,490
43,626 
47,952
Impairment provisions are recognised on inception of a loan based on the expected 12-month losses or the lifetime losses of the 
loan. Further details can be found on page 111. 
At 26 February 2022 the amounts receivable from customers are as follows:
Group
Company
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Gross carrying amount
93,076 
90,063 
74,344 
80,529 
Impairment provision
(37,229)
(36,573)
(30,718)
(32,577)
Net amounts receivable
55,847 
53,490 
43,626 
47,952
125
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

16. TRADE AND OTHER RECEIVABLES CONTINUED
Amounts receivable from Group customers can be reconciled as follows:
Group
Ref*
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
2021/22
IFRS 9
Total
£’000
Gross carrying amount
At 27 February 2021
48,763 
20,565 
20,735 
90,063 
New financial assets originated
1
148,548 
374 
328 
149,250 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(30,499)
30,499 
 – 
–
From Stage 1 to Stage 3
2
(17,847)
 – 
17,847 
–
From Stage 2 to Stage 1
2
1,269 
(1,269)
 – 
–
From Stage 2 to Stage 3
2
 – 
(6,491)
6,491 
–
From Stage 3 to Stage 1
2
74 
 – 
 (74)
–
From Stage 3 to Stage 2
2
 – 
1,759 
(1,759)
–
Write-offs
3
(11,734)
(4,779)
(22,195)
(38,708)
Collections
4
(191,658)
(25,672)
(778) 
(218,108)
Revenue
5
104,229 
6,086 
491 
110,806 
Other movements
6
(2,111)
(211) 
2,095 
(227)
At 26 February 2022
49,034 
20,861 
23,181 
93,076 
Loan loss provision account
At 27 February 2021
8,214 
10,732 
17,627 
36,573 
Movements through income statement:
New financial assets originated
7
29,400 
251 
467 
30,118 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(12,913)
15,433 
 – 
2,520 
From Stage 1 to Stage 3
2
(14,531)
 – 
15,757 
1,226 
From Stage 2 to Stage 1
2
251 
(277)
 – 
(26)
From Stage 2 to Stage 3
2
 – 
(5,530)
5,514 
(16)
From Stage 3 to Stage 1
2
18 
 – 
(20)
(2)
From Stage 3 to Stage 2
2
 – 
1,122 
(1,121)
1
Remeasurements within existing stage
3
5,123 
(5,977)
3,966 
3,112 
Payment frequency underlay
8
27 
(677)
(323)
(973)
Total movements through income statement
7,375 
4,345 
24,240 
35,960 
Other movements:
Write-offs
3
(11,734)
(4,779)
(22,195)
(38,708)
Other movements
6
2,501 
(711)
1,614
3,404
Loan loss provision account at 26 February 2022
6,356 
9,587
21,286
37,229 
Reported amounts receivable from customers at 26 February 2022
42,678
11,274
1,895
55,847 
Reported amounts receivable from customers at 27 February 2021
40,549 
9,833 
3,108 
53,490
*	
References above indicate what each line of the table demonstrates: 
(1)	 New loans issued in the year 
(2)	 Staging movements of new loans issued and existing debt brought forward 
(3)	 Net write-offs per Stage 
(4)	 Collections per Stage 
(5)	 Revenue per Stage 
(6)	 Other movements, including acquisitions and complaints liability write-off
(7)	 Impairment provision associated with new loans issued in the year 
(8)	 Payment frequency underlay 
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
126
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Company
Ref*
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
2021/22
IFRS 9
Total
£’000
Gross carrying amount
At 27 February 2021
41,983 
18,557 
19,990 
80,530 
New financial assets originated
1
107,299 
374 
328 
108,001 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(25,610)
25,610 
–
–
From Stage 1 to Stage 3
2
(8,648)
–
8,648 
–
From Stage 2 to Stage 1
2
1,232 
(1,232)
–
–
From Stage 2 to Stage 3
2
–
(6,251)
6,251 
–
From Stage 3 to Stage 1
2
70 
–
(70)
–
From Stage 3 to Stage 2
2
–
1,745 
(1,745)
–
Write-offs
3
(1,233)
(1,496)
(16,893)
(19,622)
Collections
4
(150,904)
(24,403)
(154) 
(175,461)
Revenue
5
76,472 
5,249 
68 
81,789 
Other movements
6
(2,594)
467 
1,234 
(893)
At 26 February 2022
38,067 
18,620 
17,657 
74,344 
Loan loss provision account
At 27 February 2021
6,258
9,168 
17,151
32,577 
Movements through income statement:
New financial assets originated
7
16,831 
251 
467 
17,549 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(11,411)
12,295 
–
884 
From Stage 1 to Stage 3
2
(7,235)
–
7,795 
560 
From Stage 2 to Stage 1
2
246 
(265)
–
(19)
From Stage 2 to Stage 3
2
–
(5,327)
5,327 
–
From Stage 3 to Stage 1
2
17 
–
(19)
(2)
From Stage 3 to Stage 2
2
–
1,111 
(1,111)
–
Remeasurements within existing stage
3
1,449 
(6,830)
3,338 
(2,043)
Payment frequency underlay
8
27 
(677)
(323)
(973)
Total movements through income statement
(76)
558 
15,474 
15,956 
Other movements:
Write-offs
3
(1,233)
(1,496)
(16,893)
(19,622)
Other movements
6
–
–
1,807
1,807
Loan loss provision account at 26 February 2022
4,949 
8,230 
17,539
30,718
Reported amounts receivable from customers at 26 February 2022
33,118 
10,390
118
43,626 
Reported amounts receivable from customers at 27 February 2021
35,725 
9,389 
2,839
47,953
*	
References above indicate what each line of the table demonstrates: 
(1)	 New loans issued in the year 
(2)	 Staging movements of new loans issued and existing debt brought forward 
(3)	 Net write-offs per Stage 
(4)	 Collections per Stage 
(5)	 Revenue per Stage 
(6)	 Other movements, including acquisitions 
(7)	 Impairment provision associated with new loans issued in the year 
(8)	 Payment frequency underlay 
127
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

16. TRADE AND OTHER RECEIVABLES CONTINUED
Group
Ref*
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
2020/21
IFRS 9
Total
£’000
Gross carrying amount
At 29 February 2020
60,345 
34,602 
25,999 
120,946 
New financial assets originated
1
129,004 
4 
–
129,008 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(30,617)
30,617 
–
–
From Stage 1 to Stage 3
2
(9,314)
–
9,314 
–
From Stage 2 to Stage 1
2
2,147 
(2,147)
–
–
From Stage 2 to Stage 3
2
–
(10,415)
10,415 
–
From Stage 3 to Stage 1
2
90 
–
(90)
–
From Stage 3 to Stage 2
2
–
2,755 
(2,755)
–
Write-offs
3
(9,310)
(9,224)
(15,581)
(34,115)
Collections
4
(185,567)
(34,351)
(7,216)
(227,134)
Revenue
5
90,973 
8,730 
531 
100,234 
Other movements
6
1,012 
(6)
118 
1,124 
At 27 February 2021
48,763 
20,565 
20,735 
90,063 
Loan loss provision account
At 29 February 2020
9,110 
16,887 
22,121 
48,118 
Movements through income statement:
New financial assets originated
7
18,834 
2 
–
18,836 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(12,539)
14,166 
–
1,627 
From Stage 1 to Stage 3
2
(7,271)
–
7,841 
570 
From Stage 2 to Stage 1
2
318 
(351)
–
(33)
From Stage 2 to Stage 3
2
–
(8,666)
8,666 
–
From Stage 3 to Stage 1
2
25 
–
(28)
(3)
From Stage 3 to Stage 2
2
–
1,758 
(1,758)
–
Remeasurements within existing stage
3
10,181 
(3,379)
(3,295)
3,507 
Prior year Covid-19 overlay reversal
8
(1,134)
(461)
(75)
(1,670)
Total movements through income statement
8,414 
3,069 
11,351 
22,834 
Other movements:
Write-offs
3
(9,310)
(9,224)
(15,581)
(34,115)
Other movements
6
–
–
(264)
(264)
Loan loss provision account at 27 February 2021
8,214 
10,732 
17,627 
36,573 
Reported amounts receivable from customers at 27 February 2021
40,549
9,833
3,108
53,490
Reported amounts receivable from customers at 29 February 2020
51,235
17,715
3,878
72,828
*	
References above indicate what each line of the table demonstrates: 
(1)	 New loans issued in the year 
(2)	 Staging movements of new loans issued and existing debt brought forward 
(3)	 Net write-offs per Stage 
(4)	 Collections per Stage 
(5)	 Revenue per Stage 
(6)	 Other movements, including acquisitions 
(7)	 Impairment provision associated with new loans issued in the year 
(8)	 Covid-19 overlay 
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
128
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Company
Ref*
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
2020/21
IFRS 9
Total
£’000
Gross carrying amount
At 29 February 2020
55,786 
32,489 
24,499 
112,774 
New financial assets originated
1
109,692 
4 
–
109,696 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(27,214)
27,214 
–
–
From Stage 1 to Stage 3
2
(8,114)
–
8,114 
–
From Stage 2 to Stage 1
2
2,139 
(2,139)
–
–
From Stage 2 to Stage 3
2
–
(10,382)
10,382 
–
From Stage 3 to Stage 1
2
90 
–
(90)
–
From Stage 3 to Stage 2
2
–
2,755 
(2,755)
–
Write-offs
3
(4,432)
(6,251)
(13,884)
(24,567)
Collections
4
(163,726)
(33,490)
(6,643)
(203,859)
Revenue
5
77,818 
8,363 
249 
86,431 
Other movements
6
(62)
14 
104 
55 
At 27 February 2021
41,977 
18,577 
19,975 
80,529 
Loan loss provision account
At 29 February 2020
8,024 
15,364 
21,506 
44,894 
Movements through income statement:
New financial assets originated
7
14,248 
2 
–
14,250 
Net transfers and changes in credit risk:
From Stage 1 to Stage 2
2
(10,848)
11,638 
–
790 
From Stage 1 to Stage 3
2
(6,319)
–
6,778 
459 
From Stage 2 to Stage 1
2
316 
(339)
–
(23)
From Stage 2 to Stage 3
2
(8,637)
8,637 
–
From Stage 3 to Stage 1
2
25 
–
(27)
(2)
From Stage 3 to Stage 2
2
–
1,758 
(1,758)
–
Remeasurements within existing stage
3
5,834 
(3,248)
(2,927)
(341)
Prior year Covid-19 overlay reversal
8
(591)
(1,132)
(1,615)
(3,339)
Total movements through income statement
2,665 
41 
9,088 
11,794 
Other movements:
Write-offs
3
(4,432)
(6,251)
(13,884)
(24,567)
Other movements
6
–
13 
443 
456 
Loan loss provision account at 27 February 2021
6,257 
9,167 
17,153 
32,577 
Reported amounts receivable from customers at 27 February 2021
35,720
9,410
2,823
47,952
Reported amounts receivable from customers at 29 February 2020
47,762
17,125
2,993
67,880
*	
References above indicate what each line of the table demonstrates: 
(1)	 New loans issued in the year 
(2)	 Staging movements of new loans issued and existing debt brought forward 
(3)	 Net write-offs per Stage 
(4)	 Collections per Stage 
(5)	 Revenue per Stage 
(6)	 Other movements, including acquisitions 
(7)	 Impairment provision associated with new loans issued in the year 
(8)	 Covid-19 overlay 
129
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

16. TRADE AND OTHER RECEIVABLES CONTINUED
A breakdown of the gross receivable by internal credit risk rating is shown below:
Group
Credit Risk Grade
2021/22
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
Total
£’000
Very Good
32,737 
10,884 
13,113 
56,734 
Good
12,152 
 8,417 
7,299 
27,868 
Satisfactory
3,137 
1,138 
992 
5,267 
Lower Quality
 1,008 
422 
1,777 
 3,207 
Total
49,034 
20,861 
23,181 
93,076 
Company
Credit Risk Grade
2021/22
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
Total
£’000
Very Good
28,015 
9,611 
8,852 
46,478 
Good
9,878 
8,120 
7,016 
25,014 
Satisfactory
167 
693 
422 
1,282 
Lower Quality
7 
196 
1,367 
1,570 
Total
38,067 
18,620 
17,657 
74,344 
Group
Credit Risk Grade
2020/21
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
Total
£’000
Very Good
 32,285 
 8,910 
 9,407 
50,602 
Good
 14,330 
 9,833 
 8,628 
32,791 
Satisfactory
 1,719 
 1,340 
 622 
3,681 
Lower Quality
 431 
 481 
 2,077 
2,989 
Total
 48,765 
 20,564 
 20,734 
 90,063 
Company
Credit Risk Grade
2020/21
Stage 1
£’000
Stage 2
£’000
Stage 3
£’000
Total
£’000
Very Good
 27,518 
 7,416 
 8,831 
43,765 
Good
 13,652 
 9,701 
 8,574 
31,927 
Satisfactory
 765 
 1,126 
 561 
2,452 
Lower Quality
 42 
 334 
 2,009 
2,385 
Total
 41,977 
 18,577 
 19,975 
 80,529 
Morses Club assesses the quality of its customers according to payment performance. Customers who have a payment 
performance of 100% are classified as Very Good. Customers with a payment performance of between 75% and 99% are 
classified as Good. Customers with a payment performance of between 40% and 74% are classified as Satisfactory. All other 
customers are classified as Lower Quality.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
130
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

17. TRADE AND OTHER PAYABLES
Note
Group
Company
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Trade creditors
2,468 
3,842 
2,138 
2,956 
Amounts owed to Group undertakings
–
–
1,321 
1,321 
Social security and other taxes
634 
925 
471 
925 
Other creditors
538 
778 
397 
740 
Customer complaints provision
29
41,929 
2,012 
41,929 
2,012 
Accrued expenses
2,761 
4,494 
1,795
3,916 
48,330
12,051
48,051
11,870
18. BANK AND OTHER BORROWINGS: AMOUNTS FALLING DUE AFTER ONE YEAR
Group and Company
26.2.22
£’000
27.2.21
£’000
Bank loans
19,400
 8,500 
Unamortised arrangement fees
(174)
(198)
19,226
 8,302 
In May 2021 the Company reached an agreement with a new two-lender consortium, providing a more cost-efficient and 
reduced £35m facility (FY21: £40m), now extended to the end of March 2023. The new facility continues funding our existing  
HCC products, in addition to unlocking funding for our Dot Dot Loan products and helping the business achieve its immediate 
strategic objectives.
We draw attention to note 1 in the financial statements, which indicates that the Group’s current facility of £35m expires on 31 
March 2023. Discussions continue with lenders regarding the covenants within the facility, the extension or temporary deferral 
of the term-out clause which would be enacted by the end of September 2022 and would place restrictions on the ability of 
the Group to issue new loans and the facility’s possible extension. This term-out clause is pre-existing and essentially provides 
assurance to the funders of the repayment of the facility within the last 6 months of the agreed term. In practice, this has the 
effect of converting the rolling credit facility to a term loan. This would mean that any subsequent collections made on the 
loan book, would be ringfenced to pay down the facility, less any operational costs the business has. Therefore, it would place 
restrictions on the business with regard to the issue of new loans. Discussions with the lenders have already led to a temporary 
deferral of the testing of two covenants from August to September 2022, to allow time for further discussions. These two 
covenants are linked to profitability and, if tested, are likely to fall outside of covenant range. There has been no breach, nor waiver 
of covenants up until the date of the report. The Board recognises that as the current funding facility is in place for less than 12 
months following the date of signing the Financial Statements there is also material uncertainty regarding secured funding. 
As anticipated, the impact of Covid-19 resulted in reduced lending volumes, a smaller loan book and lower levels of borrowing. In 
FY22 borrowing peaked at £28.6m in December 2021 (December 2020: £22.5m). The bank loan is made up of a revolving credit 
facility held with Shawbrook Bank Limited and a major high street bank. Under the terms of the loan covenants, the loan book is 
held as collateral against the funds borrowed. The net carrying value of the loan book at the reporting date was £55,847,008 
(2021: £53,490,135).
131
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

19. LEASES
Group
26.2.22
£’000
Group
27.2.21
£’000
Company
26.2.22
£’000
Company
27.2.21
£’000
Current
778 
790 
721 
740 
Non-current
1,063 
994 
469 
343 
1,841 
1,784 
1,190 
1,083 
Other leases
Land & buildings
Total
Group 
26.2.22
£’000
Company 
26.2.22
£’000
Group 
26.2.22
£’000
Company 
26.2.22
£’000
Group 
26.2.22
£’000
Company 
26.2.22
£’000
Existing:
 
 
 
 
 
 
Within one year
711 
711
67
10
778 
721
Between one and five years
452
452
341
17
793
469
In more than five years
–
–
270
–
270
–
1,163
1,163
678
27
1,841
1,190
Other leases
Land & buildings
Total
Group
27.2.21
£’000
Company 
27.2.21
£’000
Group 
27.2.21
£’000
Company 
27.2.21
£’000
Group 
27.2.21
£’000
Company 
27.2.21
£’000
Existing:
Within one year
686
686
104
54
790
740
Between one and five years
291
291
335
52
626
343
In more than five years
–
–
368
–
368
–
977
977
807
106
1,784
1,083
The total cash outflow from leases in the 52 weeks ended 26 February 2022 amounted to £1,165,019 (2021: £1,851,976) for the 
Group including short-term lease cash outflows of £Nil (2021: £12,949). At the end of the period, the Group is also committed to 
£Nil (2021: £Nil) for short-term leases. Total cash outflows for the Company amounted to £1,021,018 (2021: £1,685,719).
See Note 15 for additional information on leases.
20. LEASE COMMITMENTS
The following lease obligations fall outside of the scope of IFRS 16. The amounts committed to be paid under the terms of these 
lease agreements are as follows:
Group and Company
Land & buildings
26.2.22
£’000
27.2.21
£’000
Existing:
 
Within one year
75
35 
Between one and five years
–
9 
75
44 
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
132
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

21. DEFERRED TAX
Group
Company
26.2.22
£’000
27.2.21
£’000
26.2.22
£’000
27.2.21
£’000
Fixed asset temporary differences
(124)
102
(124)
102
Other temporary differences
9,236
479
8,566
569
Deferred tax asset
9,112
 581 
8,442
 671 
Group
£’000
Company
£’000
Balance as at 27 February 2021
581 
671 
Accelerated capital allowances
Deferred tax charge in profit and loss account for period - current year
(44)
(50)
Deferred tax charge in profit and loss account for period - prior year
(25)
–
Deferred tax rate change
30
55
Short-term timing differences
Deferred tax charge in profit and loss account for period - current year
(84)
(98)
Deferred tax charge in profit and loss account for period - prior year
5
–
Deferred tax rate change
171
168
Intangibles
Deferred tax charge in profit and loss account for period - current year
(437)
(548)
Deferred tax charge in profit and loss account for period - prior year
(648)
(324)
Deferred tax rate change
(287)
(172)
Share-based payments
Deferred tax charge on share-based payments included in OCI
(35)
(35)
Deferred tax charge in profit and loss account for period - current year
(183)
(183)
Deferred tax charge in profit and loss account for period - prior year
–
–
Deferred tax rate change
58
58
Losses
Deferred tax charge in profit and loss account for period - current year
9,976
8,900
Deferred tax charge in profit and loss account for period - prior year
26
–
Deferred tax rate change
8
–
Balance as at 26 February 2022
9,112
8,442
Group
£’000
Company
£’000
Asset values for which deferred tax has not been recognised in relation to the tax written down value of 
intangible fixed assets which is not available to deduct against profits until the intangibles are realised
748 
748 
Asset values for which deferred tax has not been recognised in relation to tax losses carried forward which are 
available to offset against future taxable profits from the same trade
1,224 
235 
Total value of assets on which deferred tax has not been recognised
1,972 
983 
Deferred tax assets have been recognised in respect of all tax losses and other temporary differences where the Directors believe 
it is probable that these assets will be recovered.
133
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

22. CALLED UP SHARE CAPITAL
Authorised, allotted, issued and fully paid:
Number
Class
Nominal 
Value
 26.2.22 
£’000
 27.2.21 
£’000
129,500,000
Ordinary
£0.01 
 1,295 
 1,295 
292,100
Ordinary
£0.01 
 3 
 3 
1,452,400
Ordinary
£0.01 
 14 
 14 
1,286,095
Ordinary
£0.01 
 13 
 13 
1,900,979
Ordinary
£0.01 
 19 
– 
 
 
 
 1,344 
 1,325 
23. RESERVES
Group
Retained
earnings
£’000
Total
£’000
At 29 February 2020
69,344 
69,344 
Profit for the period
217 
217 
Share-based payment charge
1,079 
1,079 
Dividends paid
(1,312)
(1,312)
At 27 February 2021
69,328
69,328
Loss for the period
(33,367)
(33,367) 
Share-based payment charge
242 
242 
Dividends paid
(5,317)
(5,317)
At 26 February 2022
30,886
30,886
Company
Group
reconstruction
reserve
£’000
Retained
earnings
£’000
Total
£’000
At 29 February 2020
(9,276)
88,562 
79,286 
Profit for the period
–
11,531 
11,531 
Share-based payment charge
–
1,079 
1,079 
Dividends paid
–
(1,312)
(1,312)
At 27 February 2021
(9,276)
99,860 
90,584 
Loss for the period
–
(26,181) 
(26,181) 
Share-based payment charge
–
242 
242
Dividends paid
–
(5,317)
(5,317)
At 26 February 2022
(9,276)
68,604
59,328
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
134
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

24. RETIREMENT BENEFIT SCHEMES
Defined contribution schemes
The Group operates defined contribution retirement benefit schemes for all qualifying employees. The assets of the schemes 
are held separately from those of the Group in funds under the control of the pension provider. Where there are employees who 
leave the schemes prior to vesting fully in the contributions, the contributions payable by the Group are reduced by the amount of 
forfeited contributions.
The total cost charged of £893,834 (2021: £979,110) represents contributions payable to these schemes by the Group at rates 
specified in the rules of the plans. Contributions payable to the schemes at the year end were £180,667 (2021: £180,943).
25. ULTIMATE PARENT COMPANY
The Directors consider there to be no ultimate parent company.
26. FINANCIAL INSTRUMENTS
The Group and the Company’s principal financial instruments are amounts receivable from customers, cash, bank overdrafts and 
bank loans.
The Group and the Company’s business objectives rely on maintaining a well spread customer base of carefully controlled quality 
by applying strong emphasis on good credit management, both through strict lending criteria at the time of underwriting a new 
credit facility and continuous monitoring of the collection process.
As at 26 February 2022 the Company and Group’s indebtedness amounted to £19.4m (2021: £8.5m).
Currency risk
The Group and the Company have no exposure to foreign currency risk.
Credit risk
Credit risk is the risk that the Group will suffer loss in the event of a default by a customer or a bank counterparty. A default occurs 
when the customer or bank fails to honour repayments as they fall due.
The Group has not disclosed impairment allowance split by risk rating as this split is not used internally by the Group to monitor 
loan book performance.
There is additional credit risk at Company level in relation to amounts owed from Group undertakings, this amounted to £25.2m 
(2021: £21.0m).
(i) Amounts receivable from customers
The Group’s maximum exposure to credit risk on amounts receivable from customers as at 26 February 2022 is the carrying 
value of amounts receivable from customers of £55,847,008 (2021: £53,490,135).
The Company’s maximum exposure to credit risk on amounts receivable from customers as at 26 February 2022 is the carrying 
value of amounts receivable from customers of £43,626,363 (2021: £47,952,408).
Home Collected Credit
Credit risk is managed using a combination of lending policy criteria, credit scoring (including behavioural scoring), policy rules, 
individual lending approval limits, central underwriting and a home visit to make a decision on applications for credit.
Loan applications can be made via the agent, directly through the customer portal or via brokers. The loans offered to customers 
are short-term, typically a contractual period of between 22 and 52 weeks (2021: between 22 and 52 weeks), with an average 
value of approximately £423 (2021: £396). The loans are underwritten in the customers’ home by an agent following a full 
affordability assessment and eligibility against credit policy. Once a loan has been made, the agent visits the customer weekly 
to collect repayments. The agent is well placed to identify signs of strain on a customer’s income and can moderate lending 
accordingly. Equally, the regular contact and professional relationship that the agent has with the customer allows them to 
manage customers’ repayments effectively even when the household budget is tight. This can be in the form of taking part-
payments, allowing missed payments or occasionally restructuring the debt in order to maximise cash collections. The agent also 
has the ability to take collections remotely if this better serves the customer.
Agents are paid commission for what they collect and not for what they lend, so their main focus is on ensuring loans are 
affordable at the point of issue and then on collecting cash. Affordability is reassessed by the agent each time an existing 
customer is re-served. This normally takes place within 12 months of the previous loan because of the short-term nature of  
the products. 
135
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

26. FINANCIAL INSTRUMENTS CONTINUED
Home Collected Credit continued
Write-off is when a customer has made no payments on their account for 17 weeks and the account is transferred out of field 
operations to customer support.
Arrears management is a combination of central letters, central telephony, and field activity undertaken by field management. 
This will often involve a home visit to discuss the customer’s reasons for non-payment and to agree a suitable resolution.
During the period, loans to the contractual value of £194,512,833 (2021: £198,346,704) were provided to customers.
Digital
The loans provided by Dot Dot Loans are only available online with applications coming directly through the website or via brokers; 
c.90% of new customer loans coming via broker applications.
Credit risk is managed using a combination of lending policy criteria, credit scoring (including behavioural scoring for returning 
customers), policy rules, full income and expenditure validation leading to individual lending approval limits. Only 7% of applications 
received are accepted through the lending rules. There is a central underwriting team who review applications with discrepancies, 
prior to funding, on approximately 25% of the loans.
There are short and long-term loans offered to customers. Short-term loans typically have a contractual period of between three 
months and nine months (2021: between three and nine months), with an average value of approximately £365 (2021: £363). 
Long-term loans have a contractual period of between 18 months and 48 months (2021: between 18 and 48 months). The loans 
offered to customers are typically between three and nine months with an average value across these terms of £365 (2021: 
£363). Once a loan has been made, the customer makes monthly repayments.
The primary repayment method is via direct debit, however, repayments can also be made by a card payment or online transfer 
to the Company.
Write-off is when a customer has missed more than three monthly payments and the account is transferred to customer support.
Arrears management is a combination of central letters, central telephony, emails and SMS text messages. This will often 
involve a phone call to discuss the customer’s reasons for non-payment and to agree a suitable resolution. Where customers 
cannot make the monthly repayments our Collections team may discuss an appropriate payment plan to help ensure the loan 
repayments are manageable for the customer. We do not charge missed payment or late fees. The Collections team are not paid 
commission on what they collect.
During the period, loans to the contractual value of £78,488,280 (2021: £35,339,405) were provided to customers.
(ii) Bank counterparties
The Group’s maximum exposure to credit risk on bank counterparties as at 26 February 2022 was £6,178,543 (2021: 
£8,257,930).
Counterparty credit risk arises as a result of cash deposits placed with banks.
Counterparty credit risk is managed by the Board of Directors which ensures that the Group’s cash deposits placed with banks 
are only made with investment grade counterparties with the level of permitted exposure to a counterparty firmly linked to the 
strength of its credit rating. All counterparties in both current year and prior year have been investment grade A-1. The gross 
carrying amount of the counterparty balances as at 26 February 2022 was £6,178,543 (2021: £8,257,930).
Liquidity risk
Liquidity risk is the risk that the Group will have insufficient liquid resources available to fulfil its operational plans and/or to meet 
its financial obligations as they fall due.
Liquidity risk is managed by daily monitoring of expected cash flows and ensuring that the Group maintains headroom on its 
committed borrowing facilities to fund growth and contractual maturities for at least the following 12 months. In the year funding 
was available through a £35m revolving asset-based credit facility. The Group’s liquidity risk is shown in the following tables which 
measure the cumulative liquidity gap. Most of the Group’s financial assets are repayable within one year which results in a positive 
liquidity position.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
136
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

In May 2021 we successfully reached agreement with a new two-lender consortium, providing a more cost-efficient and reduced 
£35m facility (FY21: £40m), now extended to March 2023. The new facility continues funding our existing HCC products, in 
addition to unlocking funding for our Dot Dot Loan products and helping the business achieve its immediate strategic objectives. 
Management are currently in ongoing discussions with the existing lenders regarding an extension to the existing funding 
arrangement which would provide sufficient cash flow to meet the future needs of business as per the forecast.
However this is yet to be formally agreed and as such, gives rise to an area of material uncertainty to the Group’s and Company’s 
ability to continue as a going concern.
Group 
At 26 February 2022
Less than
1 year
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than
5 years
£’000
No fixed
maturity date
£’000
Total
£’000
Financial assets
 59,393 
 2,633 
–
–
–
 62,026 
Other assets
 10,179 
2,925 
4,186 
177 
 22,134 
 39,601 
Total assets
69,572 
5,558 
4,186 
 177 
 22,134 
 101,627 
Shareholders’ funds
–
–
–
–
(32,229)
(32,229)
Financial liabilities
(3,784) 
 (19,612) 
 (407) 
(270) 
 – 
(24,073)
Other liabilities
(23,633)
(12,089)
(9,603)
–
–
(45,325)
Total liabilities and shareholders’ funds
(27,417)
(31,701)
(10,010)
(270) 
(32,229)
(101,627)
Cumulative position
 42,155 
 16,012 
10,188 
 10,095 
 – 
 –
Group 
At 27 February 2021
Less than  
1 year  
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than  
5 years  
£’000
No fixed  
maturity date  
£’000
Total  
£’000
Financial assets
 54,795 
82
–
–
–
 54,877 
Other assets
 4,927
–
–
–
 24,728 
 29,655
Cash at bank and in hand
 8,258 
–
–
–
–
 8,258 
Total assets
 67,980 
82
–
–
 24,728 
 92,790
Shareholders’ funds
–
–
–
–
(70,653)
(70,653)
Other liabilities
(12,841)
(9,296)
–
–
–
(22,137)
Total liabilities and shareholders’ funds
(12,841)
(9,296)
–
–
(70,653)
(92,790)
Cumulative position
 55,139 
 45,925 
 45,925 
 45,925 
 – 
 – 
Company 
At 26 February 2022
Less than
1 year
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than
5 years
£’000
No fixed
maturity date
£’000
Total
£’000
Financial assets
 73,518 
–
–
–
–
73,518 
Other assets
7,919 
2,109 
2,761 
 15 
 42,817 
 55,621 
Total assets
 81,437 
2,109 
 2,761 
15 
 42,817 
 129,139 
Shareholders’ funds
–
–
–
–
(60,672)
(60,672)
Financial liabilities
(3,256)
(19,547)
(148)
 –
 –
(22,951)
Other liabilities
(23,824)
(12,089)
(9,603)
–
–
(45,516)
Total liabilities and shareholders’ funds
(27,080)
(31,636)
(9,751)
 – 
(60,672)
(129,139)
Cumulative position
 54,357 
 24,830 
 17,840 
 17,855 
 – 
 – 
137
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

26. FINANCIAL INSTRUMENTS CONTINUED
Home Collected Credit continued
Company 
At 27 February 2021
Less than  
1 year  
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than  
5 years  
£’000
No fixed  
maturity date  
£’000
Total  
£’000
Financial assets
 49,339 
–
–
–
–
 49,339 
Other assets
 23,900 
–
–
–
 33,309 
 57,209 
Cash at bank and in hand
 6,616 
–
–
–
–
 6,616 
Total assets
 79,855 
–
–
–
 33,309 
 113,164 
Shareholders’ funds
–
–
–
–
(91,910)
(91,910)
Other liabilities
(12,610)
(8,644)
–
–
–
(21,254)
Total liabilities and shareholders’ funds
(12,610)
(8,644)
–
–
(91,910)
(113,164)
Cumulative position
 67,245 
 58,601 
58,601
 58,601 
–
–
Interest rate risk
The Group’s and Company’s activities do not expose it to significant financial risks of changes in interest rates. There is considered 
to be no material interest rate risk in cash, trade and other receivables or trade and other payables.
The Group and Company are exposed to movements in SONIA rates on its external borrowings. A 1% movement in the interest 
rate applied to financial liabilities during FY22 would not have had a material impact on the Group’s or Company’s results for  
the year.
Capital risk management
The Board of Directors assess the capital needs of the Group on an ongoing basis and approve all capital transactions ensuring 
these adhere to the criteria set out in the external loan facility.
The Group’s policy is to maintain a strong equity and reserves base so as to maintain investor and market confidence and to 
sustain future development of the business. Management monitors the return on equity and return on assets and strives to 
deliver a progressive dividend policy for shareholders.
While the Group was not previously subject to any externally imposed capital requirements, it entered into a new funding 
arrangement during the period which limited capital expenditure in any given period. The limit of this expenditure is £6.5m in the 
current year with an allowance to carry forward any unutilised headroom into the next period.
The Board of Directors recognises the balance required between maximising shareholder return and maintaining a prudent 
balance sheet. To this end the Group has a formal gearing policy. The Group defines gearing as total debt/total equity and has a 
preferred average level of gearing of less than 1.0.
The Group’s gearing at 26 February 2022 was:
 
26.2.22 
£’000
27.2.21 
£’000
Gross debt
19,400
8,500 
Equity
32,230
70,653 
Gearing
0.60
0.12
Existing loan facilities are subject to a number of bespoke financial covenants such as interest cover which are monitored 
internally and submitted on a monthly basis to funders. There were no breaches of any of these covenants in the period to  
26 February 2022.
Any changes to existing or adding of new loan facilities requires the approval of the Board.
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
138
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Fair values of financial assets and liabilities
The Group has adopted the following fair value hierarchy in relation to its financial instruments that are carried in the balance 
sheet at the fair values at the year end:
•	
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
•	
Level 2 – inputs, other than quoted prices included within Level 1, that are observable for the asset or liability either directly (as 
prices) or indirectly (derived from prices); and
•	
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair values of amounts receivable from customers, bank and other borrowings are considered to be materially different from 
their book values. Fair values which are recognised or disclosed in these financial statements are determined in whole or in part 
using a valuation technique based on assumptions that are supported by prices from observable current market transactions in 
the same instrument (i.e., without modification or repackaging) and based on available observable market data. The fair value 
hierarchy is derived in accordance with IFRS 13 as follows: Level 1 for cash, Level 2 for borrowings and Level 3 for loan book, 
normal trade receivables, other payables and lease liabilities.
The following table sets out the carrying value of the Group’s financial assets and liabilities in accordance with the categories of 
financial instruments. Assets and liabilities outside the scope of IFRS 9 are shown within non-financial assets/liabilities.
Group
At 26 February 2022
Financial
assets
measured at
amortised 
cost
£’000
Financial 
liabilities
measured at
amortised
cost
£’000
Non-
financial
assets/
liabilities
£’000
Total
£’000
Assets:
Cash and cash equivalents
6,179 
–
–
6,179 
Amounts receivable from customers
55,847 
–
–
55,847 
Trade and other receivables
– 
–
6,693 
6,693 
Property, plant and equipment
–
–
689 
689 
Right-of-use asset
–
–
1,739 
1,739 
Goodwill
–
–
12,854 
12,854 
Deferred tax assets
–
–
9,112 
9,112 
Other intangible assets
–
–
8,514 
8,514 
Total assets
62,026 
–
39,601 
101,627 
Liabilities:
Bank and other borrowings
–
(19,226)
–
(19,226)
Trade and other payables
–
(3,006)
(3,395)
(6,401)
Customer complaints provision
–
–
(41,929)
(41,929)
Lease liabilities
–
(1,841)
–
(1,841)
Total liabilities
–
(24,073)
(45,324)
(69,397)
139
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

26. FINANCIAL INSTRUMENTS CONTINUED
Fair values of financial assets and liabilities continued 
Group
At 27 February 2021
Financial
assets
measured at
amortised 
cost
£’000
Financial 
liabilities
measured at
amortised
cost
£’000
Non-
financial
assets/
liabilities
£’000
Total
£’000
Assets:
Cash and cash equivalents
 8,258 
–
–
 8,258 
Amounts receivable from customers
 53,490 
–
–
 53,490 
Trade and other receivables
 2,880 
–
 3,434 
 6,314 
Property, plant and equipment
–
–
 734 
 734 
Right-of-use asset
–
–
 1,696 
 1,696 
Deferred tax assets
–
–
 581 
 581 
Goodwill
–
–
 12,854 
 12,854 
Other intangible assets
–
–
 8,863 
 8,863 
Total assets
 64,628 
–
 28,162 
 92,790 
Liabilities:
Bank and other borrowings
–
(8,302)
–
(8,302)
Trade and other payables
–
(4,621)
(5,418)
(10,039)
Customer complaints provision
–
–
(2,012)
(2,012)
Lease liabilities
–
(1,784)
–
(1,784)
Total liabilities
–
(14,707)
(7,430)
(22,137)
Company
At 26 February 2022
Financial
assets
measured at
amortised 
cost
£’000
Financial 
liabilities
measured at
amortised
cost
£’000
Non-
financial
assets/
liabilities
£’000
Total
£’000
Assets:
Cash and cash equivalents
4,689 
–
–
4,689 
Amounts receivable from customers
43,626 
–
–
43,626 
Trade and other receivables
25,203 
–
5,260 
30,463 
Property, plant and equipment
–
–
134 
134 
Right-of-use asset
–
–
1,217 
1,217 
Goodwill
–
–
3,293 
3,293 
Investment in subsidiary
–
–
31,011 
31,011 
Deferred tax assets
–
–
8,442 
8,442 
Other intangible assets
–
–
6,264 
6,264 
Total assets
73,518 
–
55,621 
129,139 
Liabilities:
Bank and other borrowings
–
(19,226)
–
(19,226)
Trade and other payables
–
(2,535)
(3,587)
(6,122)
Customer complaints provision
–
–
(41,929)
(41,929)
Lease liabilities
–
(1,190)
–
(1,190)
Total liabilities
–
(22,951)
(45,516)
(68,467)
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
140
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Company  
At 27 February 2021
Financial 
assets 
measured at 
amortised 
cost  
£’000
Financial 
liabilities 
measured at 
amortised 
cost  
£’000
Non-
financial 
assets/
liabilities  
£’000
Total  
£’000
Assets:
 
 
 
 
Cash and cash equivalents
6,616 
–
–
6,616 
Amounts receivable from customers
47,952 
–
–
47,952 
Trade and other receivables
23,033 
–
2,254
25,287 
Property, plant and equipment
–
–
129 
129 
Right-of-use asset
–
–
1,113 
1,113 
Goodwill
–
–
3,293 
3,293 
Investment in subsidiary
–
–
23,011 
23,011 
Deferred tax assets
–
–
671 
671 
Other intangible assets
–
–
5,092 
5,092 
Total assets
77,601 
–
35,563 
113,164 
 
 
 
 
 
Liabilities:
 
 
 
 
Bank and other borrowings
–
(8,302)
–
(8,302)
Trade and other payables
–
(5,018) 
(4,840) 
(9,858)
Customer complaints provision
–
–
(2,012)
(2,012)
Lease liabilities
–
(1,083)
–
(1,083)
Total liabilities
–
(14,403)
(6,852)
(21,255)
The tables below show the fair value of financial assets and liabilities not presented at fair value in the balance sheet.
Group
26.2.22
Fair Value
£’000
Book Value
£’000
27.2.21
Fair Value
£’000
Book Value
£’000
Assets:
Cash and cash equivalents
6,179 
6,179 
8,258 
8,258 
Amounts receivable from customers
69,012 
55,847 
72,764 
53,490 
Trade and other receivables
 –
 –
2,880 
2,880 
Total assets
75,191 
62,026 
83,902 
64,628 
Liabilities:
Bank and other borrowings
(19,400)
(19,226)
(8,500)
(8,302)
Trade and other payables
(3,006)
(3,006)
(4,621)
(4,621)
Lease liabilities
(1,841)
(1,841)
(1,784)
(1,784)
Total liabilities
(24,247)
(24,073)
(14,905)
(14,707)
141
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

26. FINANCIAL INSTRUMENTS CONTINUED
Fair values of financial assets and liabilities continued
Company
26.2.22
Fair Value
£’000
Book Value
£’000
27.2.21
Fair Value
£’000
Book Value
£’000
Assets:
Cash and cash equivalents
4,689 
4,689 
6,616 
6,616 
Amounts receivable from customers
56,738 
43,626 
64,195 
47,952 
Trade and other receivables
25,203 
25,203 
23,033 
23,033 
Total assets
86,630 
73,518 
93,844 
77,601 
Liabilities:
Bank and other borrowings
(19,400)
(19,226)
(8,500)
(8,302)
Trade and other payables
(2,535)
(2,535)
(5,018)
(5,018)
Lease liabilities
(1,190)
(1,190)
(1,083)
(1,083)
Total liabilities
(23,125)
(22,951)
(14,601)
(14,403)
Key considerations in the calculation of fair values of those financial assets and liabilities not presented at fair value in the balance 
sheet are set out below. Where there is no significant difference between carrying value and fair value no additional information 
has been presented. Fair value of amounts receivable from customers has been derived by discounting expected future cash 
flows (net of collection costs) at the credit risk-adjusted discount rate at the balance sheet date. They are categorised within Level 
3 as the expected future cash flows and discount rate are deemed to be significant unobservable inputs. 
Group
At 26 February 2022
Repayable
demand
£’000
Less than
1 year
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than
5 years
£’000
Total
£’000
Trade and other payables
–
3,006 
–
–
–
3,006 
Bank loans
–
–
19,226 
– 
–
19,226 
Lease liabilities
–
778 
386 
407 
270 
1,841 
At 26 February 2022
–
3,784 
19,612 
407 
270 
24,073
Company
At 26 February 2022
Repayable
demand
£’000
Less than
1 year
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than
5 years
£’000
Total
£’000
Trade and other payables
–
2,535 
–
–
–
2,535 
Bank loans
–
–
19,226 
 –
–
19,226 
Lease liabilities
–
721 
321
148
–
1,190 
At 26 February 2022
–
3,256 
 19,547 
148 
–
22,951
Group  
At 27 February 2021
 Repayable
on demand  
£’000
Less than 
1 year  
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than  
5 years  
£’000
Total  
£’000
Trade and other payables
–
3,842 
–
–
–
3,842
Tax liabilities
–
–
–
–
–
–
Accruals and deferred income
–
6,197 
–
–
–
6,197 
Customer complaints provision
–
2,012
–
–
–
2,012
Bank loans
–
–
–
8,302 
–
8,302 
Lease liabilities
–
790 
284 
342 
368 
1,784 
At 27 February 2021
–
12,841 
284 
8,644 
368 
22,137 
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
142
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Company  
At 27 February 2021
 Repayable
on demand  
£’000
Less than 
1 year  
£’000
Between
1 and
2 years
£’000
Between
2 and
5 years
£’000
More than  
5 years  
£’000
Total  
£’000
Trade and other payables
–
2,956 
–
–
–
2,956 
Tax liabilities
–
–
–
–
–
–
Accruals and deferred income
–
6,902 
–
–
–
6,902 
Customer complaints provision
–
2,012
–
–
–
2,012
Bank loans
–
–
–
8,302 
–
8,302 
Lease liabilities
–
740 
227 
116 
–
1,083 
At 27 February 2021
–
12,610 
227 
8,418 
–
21,255 
27. SHARE-BASED PAYMENTS
The Deferred Share Plan (DSP) – Senior Management Team
The Company introduced this share option plan on 26 April 2016 with 1,002,310 share options being issued under the plan 
on admission to AIM (Admission). A second share option plan was granted on 5 May 2017 when 989,700 share options were 
issued, with a third share option plan being granted on 5 May 2018 when 964,100 share options were issued. The share award 
in 2019/20 lapsed since the TSR performance conditions were not met. A fourth share option plan was granted on 21 May 2020 
when 1,100,252 share options were issued. 
The share award made in FY22 has lapsed due to the Company not meeting its required profit target. This leaves the award 
granted on 21 May 2020 (the ‘2020 Award’) as the only one that is currently in existence. 
Share awards are subject to performance conditions which are: delivery of total shareholder return, targeted profits, compliance 
training, and individual executive performance. The first of these conditions assesses the Company’s absolute total shareholder 
return (TSR), over a 12-month period. 25% of the award will vest for an increase in TSR of 7.5%, rising on a straight-line basis 
to 100% vesting for 12.6% annual TSR growth, subject to the other performance conditions referred to below. The 2020 Award 
satisfied this TSR requirement. 
Any vesting of the 2020 Award was also subject to the satisfaction of further performance conditions measured up to the end 
of the financial year ending February 2021. The Company was required to achieve the targeted level of profit before tax for the 
financial year ending in February 2021, which it did successfully. Finally, the vesting of the 2020 Award is also conditional on the 
Remuneration Committee determining that, over the period finishing at the end of the financial year ending in February 2023: 
•	
the Company’s internal and external audits and compliance training delivery have been satisfactory; 
•	
the Company has retained all relevant FCA authorisation for the carrying on of its business; and 
•	
the participant has not been subject to any disciplinary action and their personal performance has been satisfactory. 
For any subsequent annual grants, the Remuneration Committee will set any performance conditions by reference to the 
Company’s long-term strategy, which may include total shareholder return and/or financial metrics and/or key strategic goals to 
support long-term value creation. It is the Remuneration Committee’s current intention that the vesting of any Awards granted to 
the Company’s senior management team in respect of the financial year ending February 2023 will at least in part be subject to 
the Company’s TSR performance. 
Future share options are granted to Executive Directors and senior managers on a rolling annual basis at the discretion of the 
Remuneration Committee. 
Any performance condition may be amended or substituted if one or more events occur which cause the Remuneration 
Committee to consider that an amended or substituted performance condition would be more appropriate and not materially 
less difficult to satisfy. 
Awards will not be granted to a participant under the DSP over Ordinary Shares with a market value (as determined by the 
Remuneration Committee) in excess of 100% of salary in respect of any financial year.
As of the balance sheet date, the estimated market value of each share option granted is £0.13 (2021: £0.63). This has resulted in 
a charge to the profit or loss account of £145,474 (2021: £847,654) during the year. 
143
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Notes to the Consolidated Financial Statements 
continued
27. SHARE-BASED PAYMENTS CONTINUED 
The Deferred Share Plan (DSP) – Senior Management Team continued
The market value of the shares at the grant date is calculated using a Monte Carlo Simulation. The assumptions used in the 
calculation are set out below: 
Grant date
DSP
8 May
2016
5 May
2017
5 May
2018
5 May
2019
1 Jul
2019
22 Jul
2019
1 Sep
2019
28 Jan
2021
Expected volatility
26%
45%
30%
30%
31%
33%
35%
90%
Expected term
1
1
1
1
0.83
0.75
0.67
0.42
Risk-free rate
0.34%
0.34%
0.34%
1.05%
0.88%
0.88%
0.88%
0.80%
Dividend yield
0%
0%
0%
0%
0%
0%
0%
0%
Expected volatility is calculated based on movements in the Company’s share price in the 12 months preceding the grant date. 
In prior years this was based on the volatility in the share prices for the Company’s peer group due to the lack of historical data in 
relation to the Company’s own share price.
 
Number
Weighted 
Average Exercise  
Price  
(£)
Outstanding at 27 February 2021
2,064,352
–
Awarded/granted
 1,067,475 
–
Lapsed
(1,289,637)
–
Exercised
(1,066,769)
–
Outstanding at 26 February 2022
775,421
–
Exercisable as at 26 February 2022
–
–
For the share options outstanding at 26 February 2022, the weighted average remaining contractual life is 8.3 years (2021:  
8.3 years). 
All options are expected to be equity-settled. The estimated amount to be transferred to the tax authority to settle the employer’s 
tax obligations is £13,355. 
The Share Option Plan (SOP) – Employees 
On 19 October 2017 the Company introduced its first share option plan that entitles employees to purchase shares in the 
Company at an exercise price of £0.01 per share. 238,097 share options were issued under the plan. A second share option was 
granted on 5 December 2018 when 29,896 share options were issued, with a third share option plan being granted on  
4 December 2019 when 19,285 share options were granted. 
The fair value of the employee share options has been measured using the Black-Scholes valuation method. Service and non-
market performance conditions were not taken into account in measuring fair value. 
As of the balance sheet date, the estimated market value of each share option granted is £0.13 (2021: £0.63). This has resulted in 
a charge to the profit or loss account of £15,248 (2021: £37,650) during the year. 
The market value of the shares at the grant date is calculated using the Black-Scholes valuation method. The assumptions used 
in the calculation are set out below: 
Grant date
SOP
19 October 
2017
5 December 
2018
5 December 
2019
Expected volatility
40%
40%
36%
Expected term
1 year
1 year
1 year
Risk-free rate
0.75%
0.68%
0.98%
Dividend yield
4.75%
5.21%
6.14%
Expected volatility is calculated based on movements in the Company’s share price in the 12 months preceding the grant date.
Financial Statements
Corporate Governance
Strategic Report
144
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

 
Number
Weighted 
Average Exercise  
Price  
(£)
Outstanding at 27 February 2021
134,069
 0.01 
Lapsed
–
 0.01 
Exercised
(12,827)
 0.01 
Outstanding at 26 February 2022
121,242
 0.01 
Exercisable as at 26 February 2022
101,957
0.01
For the share options outstanding at 26 February 2022, the weighted average remaining contractual life is 6.2 years  
(2021: 7.2 years). 
All options are expected to be equity-settled. The estimated amount to be transferred to the tax authority to settle the employer’s 
tax obligations is £2,088. 
Share Incentive Plan (SIP) – Employees
On 5 December 2018 the Company introduced an approved share incentive scheme (SIP) for all employees and issued 292,122 
Ordinary Shares with a nominal value of £0.01. The shares are held by an independent trust for the duration of the holding 
period and subsequent share options are granted to employees on a rolling annual basis at the discretion of the Remuneration 
Committee and subject to the Company’s profit performance in the previous financial year. A second share option was granted 
on 4 December 2019 when 311,011 share options were issued, with a third share option plan being granted on 6 December 2021 
when 748,496 share options were granted. 
The fair value of the employee share options has been measured using a Black-Scholes option pricing model. Service and non-
market performance conditions were not taken into account in measuring fair value. 
As at the balance sheet date, the estimated market value of each share option granted is £0.13 (2021: £0.63). This has resulted in 
a charge to the profit or loss account of £230,124 (2021: £238,048) during the period.
Grant date
SIP
5 December 
2018
5 December 
2019
6 December 
2021
Expected volatility
41%
36%
59%
Expected term
1 year
1 year
1 year
Risk-free rate
0.68%
0.98%
0.64%
Dividend yield
0%
6.14%
5.33%
As there are no market-based performance conditions attached to this scheme the expected volatility is deemed to be neutral.
 
Number
Weighted 
Average Exercise  
Price  
(£)
Outstanding at 27 February 2021
536,021
–
Awarded/granted
748,496
–
Lapsed
(22,534)
–
Exercised
(9,657)
–
Outstanding at 26 February 2022
1,252,326
–
Exercisable as at 26 February 2022
232,183
–
For the share options outstanding at 26 February 2022, the weighted average remaining contractual life is 8.8 years  
(2021: 8.3 years). 
All options are expected to be equity-settled. The estimated amount to be transferred to the tax authority to settle the employer’s 
tax obligations is £21,568. 
145
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

28. RELATED PARTY TRANSACTIONS
Hay Wain Holdings Limited (formerly FCAP Four Limited) is the immediate parent undertaking of Hay Wain Group Limited. 
The Company undertook the following transactions with its former parent and subsidiaries during the period: 
 
Dividends 
Received/(Paid)  
£’000
Interest 
Recharge  
£’000
Professional 
Fees Recharged  
£’000
52 weeks ended 26 February 2022
 
 
 
Hay Wain Holdings Limited
–
–
–
Hay Wain Group Limited
(1,880)
–
–
Shopacheck Financial Services Limited
–
–
–
Shelby Finance Limited
–
488
–
 
(1,880)
488
–
52 weeks ended 27 February 2021
 
 
 
Hay Wain Holdings Limited
–
–
–
Hay Wain Group Limited
(477)
–
–
Shopacheck Financial Services Limited
–
–
–
Shelby Finance Limited
–
1,544
–
(477)
1,544
–
At the period end the following balances were outstanding:
 
26.2.22 
£’000
27.2.21  
£’000
Hay Wain Holdings Limited
 – 
 – 
Hay Wain Group Limited
 – 
 – 
Shopacheck Financial Services Limited
(1,321)
(1,321)
Shelby Finance Limited
26,144
21,773
Amounts owed from/(to) related parties
24,823
20,452
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions 
have been made for doubtful debts in respect of the amounts owed by related parties. 
29. PROVISIONS
Group
Customer 
Complaints
£’000
At 27 February 2021
2,012 
Provisions utilised in the year
(2,012)
Additional provisions in the year
1,786
True-up
1,008
Additional complaints liability provision
39,135
At 26 February 2022
41,929 
Notes to the Consolidated Financial Statements 
continued
Financial Statements
Corporate Governance
Strategic Report
146
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

Group
26.2.22
£’000
27.2.21
£’000
Analysed as:
Current liabilities due less than 1 year
20,237 
2,012
Non-current liabilities due more than 1 year but no more than 2 years
12,089
–
Non-current liabilities due more than 2 years but no more than 5 years
9,603 
–
At 26 February 2022
41,929 
2,012
Complaints provision
The complaints provision in relation to normal customer complaints represents management’s best estimate of the Group’s 
liability in regard to outstanding customer complaints that remained unresolved as at the balance sheet date. In estimating the 
provision, management has incorporated historical Company information for the average percentage of complaints which are 
upheld, and the average value of compensation claims paid out. A true-up of £1.0m was then applied based on uphold rates 
observed up until the signing of the accounts. 
The HCC division has experienced an increase in complaints and FOS referrals during the period which was impacted by a rapid 
increase in claim volumes submitted via claims management companies. As a result, a discernible trend has emerged leading 
the Group to recognise a liability for the cost of fully settling complaints in relation to all affected lending up to the balance sheet 
date estimated at a gross redress of £112m for customers who will be eligible to be redressed, at an estimated take-up rate of 
40%. IAS 37 requires that where the time value of money is material the present value of costs should be reflected. The liability 
of £39.1m relating to Redress Claims represents the present value of management’s best estimate of the future outflow of 
cash required to settle these claims. The full provision is recorded in the accounts of Morses Club PLC. See also Key sources of 
estimation uncertainty in note 1, page 111.
30. POST BALANCE SHEET EVENTS 
Due to significant changes in market conditions, the decision was taken pre year-end to withdraw the e-money account service U 
Account from the market. U Account subsequently closed post year-end on 3 May 2022.
As part of the future development of its operating model, the Company is currently engaging in a programme to potentially end 
the self-employed status of agents and replace the work with a new role of employed Customer Support Associates. The aim is to 
complete this process by Autumn 2022.
In light of the increased level of claims the Board decided post year-end to pursue the potential use of a Scheme of Arrangement 
under Part 26 of the Companies Act 2006 for dealing with Redress Claims. On 11 August, the Company announced it had taken 
steps to pause the processing of all new redress claims for unaffordable lending with effect from that date.
ALTERNATIVE PERFORMANCE MEASURES
This Annual Report and Financial Statements provides alternative performance measures (APMs) which are not defined or 
specified under the requirements of International Financial Reporting Standards. We believe these APMs provide readers with 
important additional information on our business. To support this, we have included a reconciliation of the APMs we use where 
relevant and a glossary indicating the APMs that we use, an explanation of how they are calculated and why we use them. 
APM
Closest
Statutory
Measure
Definition and Purpose
Income statement measures
Impairment as % of Revenue (%)
None
Impairment as a percentage of revenue is reported impairment divided by 
reported revenue and represents a measure of credit quality that is used across 
the business and within the sector. 
Agent Commission as % of Revenue 
(%)
None
Agent commission, which is included in cost of sales, divided by reported 
revenue. This calculation is used to measure operational efficiency and the 
proportion of income generated which is paid to agents.
Cost/Income Ratio or Operating 
Cost Ratio (%)
None
The cost/income ratio is cost of sales and administration expenses, excluding 
exceptional items, finance costs and amortisation divided by reported revenue. 
This is used as another efficiency measure of the Company’s cost base.
Credit Issued (£m)
None
Credit issued is the principal value of loans advanced to customers and is an 
important measure of the level of lending in the business. 
147
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

APM
Closest
Statutory
Measure
Definition and Purpose
Sales Growth (%)
None
Sales growth is the period-on-period change in Credit Issued and is used by 
management as a measure of comparative sales performance. 
Adjusted Profit Before Tax (£m)
Profit Before 
Tax
Profit Before Tax per the income statement adjusted for exceptional items, non-
recurring costs and amortisation of goodwill and acquisition intangibles. This is 
used to measure ongoing business performance. 
Adjusted Profit Before Tax 
(underlying HCC)
Profit Before 
Tax
Profit Before Tax per the income statement adjusted for exceptional items, non-
recurring costs and amortisation of goodwill and acquisition intangibles, Territory 
Build subsidies and losses of Digital CGU. 
Adjusted Earnings Per Share
Earnings Per 
Share
Adjusted Profit After Tax divided by the weighted average number of shares. 
This gives a better reflection of underlying earnings generated for shareholders. 
Reconciliation of statutory profit before tax to adjusted profit before tax and explanation of adjusted EPS
£’m (unless otherwise stated)
 FY22
 FY21
HCC
Digital
Total
HCC
Digital
Total
Statutory (Loss)/Profit Before Tax
(35.0)
(7.9)
(42.9)
11.8 
(11.3)
0.5 
Restructuring and other non-recurring costs
0.4
0.1
0.5
2.9
2.4
5.3
Exceptional costs2
44.4
2.4
46.8
–
–
–
Amortisation of acquisition intangibles3 
0.2
–
0.2
0.3
–
0.3
Adjusted Profit/(Loss) Before Tax1 
10.0
(5.4)
4.6
15.0 
(8.9)
6.1 
Tax on Adjusted Profit Before Tax
0.6
0.7
1.3
(0.8)
(0.2)
(1.0)
Adjusted Profit/(Loss) After Tax 
10.6
(4.7)
5.9
14.2 
(9.1)
5.1 
Statutory EPS1
(25.0p)
0.2p
Adjusted EPS1
4.4p
3.9p
Return on Assets1
-57.3%
-57.4%
 22.0%
0.3%
Adjusted Return on Assets1
23.2%
10.1%
 27.2% 
8.9%
Return on Equity1
-47.5%
-77.0%
18.5%
0.4%
Adjusted Return on Equity1 
19.2%
13.6%
22.8%
10.3%
1	
Definitions are set out in the Glossary of Alternative Performance Measures on pages 147 to 149 of the Annual Report and Accounts.
2	
Costs relating to the complaints liability, corporate restructure and closure of U Account.
3	
Amortisation of acquired customer lists and agent networks.
 
52 weeks 
ended  
26.2.22  
£’000
52 weeks 
ended  
27.2.21  
£’000
Adjusted basic earnings per share
 
Basic (loss)/earnings
(33,367)
217
Amortisation of acquisition intangibles
187
345 
Restructuring and other non-recurring costs
506
– 
Exceptional costs
46,779
5,339
Tax effect of the above
(8,186)
(799)
Adjusted earnings
5,919
5,102 
Weighted average number of shares for the purposes of basic earnings per share (’000s)
133,300
131,383 
Adjusted earnings per share amount (pence)
4.4p
3.9p
Notes to the Consolidated Financial Statements 
continued
ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Financial Statements
Corporate Governance
Strategic Report
148
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

APM
Closest
Statutory
Measure
Definition and Purpose
Balance sheet and returns measures
Tangible Equity (£m)
Equity
Net Assets less intangible assets less acquisition intangibles. 
Adjusted Return on Equity 
(%)
None
Calculated as adjusted profit after tax divided by rolling 12-month average of tangible 
equity. This calculation has been adjusted to an IFRS 9 basis. It is used as a measure 
of overall shareholder returns adjusted for exceptional items. This is presented within 
the Annual Report as the Directors believe it is more representative of the underlying 
operations of the business.
Adjusted Return on Assets 
(%)
None
Calculated as adjusted profit after tax divided by 12-month average Net Loan Book. This 
calculation has been adjusted to an IFRS 9 basis. It is used as a measure of profitability 
generated from the loan book. Net Loan Book is amounts owing from customers less 
provisions for deferred income and impairments. This is presented within the Annual 
Report as the Directors believe it is more representative of the underlying operations of the 
business.
Tangible Equity/Average 
Receivables Ratio (%)
None
Net Assets less intangible assets less acquisition intangibles divided by 12-month average 
receivables. This calculation has been adjusted to an IFRS 9 basis. 
Adjusted return on assets and adjusted return on equity
Adjusted Return on Assets and Adjusted Return on Equity 
£’m
52 weeks ended 
26.2.22
FY22
52 weeks ended 
27.2.21
FY21
Adjusted Profit After Tax (rolling 12 months)
5.9
5.1
12-month average Net Loan Book
58.2
57.5
Adjusted Return on Assets
10.14%
8.87%
12-month average Equity
43.4
48.1
Adjusted Return on Equity
13.59%
10.29%
APM
Closest
Statutory
Measure
Definition and Purpose
Other measures
Customers
None
Customers who have an active loan and from whom we have received a payment of at 
least £3 in the last 17 weeks. 
Agents
None
Agents are self-employed individuals who represent the Group’s subsidiaries and are 
engaged under an agency agreement. 
Cash from Operations 
(excluding investment in loan 
book) (£m)
Cash from 
Operations
Cash from Operations (excluding investment in the loan book) is Cash from Operations 
excluding the growth in the loan book due to either acquisition or movement in the net 
receivable otherwise. 
Adjusted Net Margin
None
Adjusted profit before tax (which excludes amortisation of intangibles on acquisitions, 
the one-off costs of the IPO and other non-operating costs) divided by reported 
revenue. This is used to measure overall efficiency and profitability. 
Cash from Funding (£m)
None
Cash from Funding is the increase/(decrease) in the bank loan balance. 
149
Morses Club PLC
ANNUAL REPORT & ACCOUNTS 2022 

Morses Club PLC Information for Shareholders
FINANCIAL CALENDAR 2022
27 August 2022	 End of H1, FY23
4 October 2022	 Annual General Meeting
COMPANY INFORMATION
Registered Office and Website
Building 1
The Phoenix Centre
1 Colliers Way
Nottingham
NG8 6AT
Website: www.morsesclubplc.com
Email: investors@morsesclubplc.com
Company Registration Number
06793980
Independent Auditor
Deloitte LLP
Four Brindley Place
Birmingham
B1 2HZ
Nominated Adviser
Peel Hunt LLP
Moor House
120 London Wall
London
EC2Y 5ET
Broker
Peel Hunt LLP
Moor House
120 London Wall
London
EC2Y 5ET
Solicitor
Eversheds Sutherland
(International) LLP
Bridgewater Place
Water Lane
Leeds
LS11 5DR
Financial Communications
Camarco Limited
107 Cheapside  
London
EC2V 6DN
Registrar
Link Asset Services
34 Beckenham Road
Beckenham  
Kent
BR3 4TU
Financial Statements
Corporate Governance
Strategic Report
150
Morses Club PLC 
ANNUAL REPORT & ACCOUNTS 2022 

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Morses Club PLC
Building 1
The Phoenix Centre
1 Colliers Way
Nottingham
NG8 6AT